HB 

ni 

^- ECONOMICS 

/or Upper Grades 



DOLE 



D. C. HEATH & CO. 




Class JdB-nx- 

Book t^ 

CopigiitN" -Ji (o. 



ECONOMICS FOR 
UPPER GRADES 



BY 



CHARLES F. DOLE 



WITH INTRODUCTION BY 

ALBERT SHIELS 

RECENTLY SUPERINTENDENT OF SCHOOLS 
LOS ANGELES, CALIFORNIA 



D. C. HEATH & CO., PUBLISHERS 

BOSTON NEW YORK CHICAGO 



0^ 

5' 



Copyright, 191 8 and 1920 
By Charles F. Dole 

2EO 



©C;i,A570539 

JUL -2 1820. 



INTRODUCTION 

The war has stirred mightily the hearts of men. Exal- 
tation, sacrifice, and service have suffered their inevitable 
reaction. The development of industry has brought new 
alignments, and though these would have confronted us in 
any case, yet now, in the reaction from a great emotion, the 
world that meets them is a troubled, a hesitant, a disappointed 
world. Old conceptions, some of them as old as the nation, 
which were once accepted as we accept the sunrise or the rule 
of three, are called upon to prove their own vaUdity. De- 
mocracy is no longer a question of a constitution or a code 
of laws ; it is enmeshed in problems of wages and costs and 
distribution. We cannot understand our politics unless we 
study our economics. Perhaps it is as well that Americans 
are being compelled to analyze the truth of principles they 
so long have taken for granted, if for no other reason than 
that they have accepted them too casually, and too in- 
dolently. The political heritage of a people will not endure 
neglect. Such things as representative government, the 
rule of the majority, the liberty of opinion, obedience to law, 
were gained by painful effort, and only painful effort will 
retain them. 

These ideas and others akin to them are the sacred things 
of the Republic. In the Egypt of the ancients, it was the 
duty of a priesthood to preserve the traditions of the people. 
Education and those engaged in education are the priesthood 
of the modern time. 

They it is who must keep the torch ahght and through the 
children pass it to succeeding generations. And because 

iii 



iv INTRODUCTION 

at this time not only the defects of our democracy, but its 
principles as well, are being subjected to criticism, and to 
assault, because any intelligent discussion of these questions 
must hinge on economic as well as on political principles, 
the schools are charged, as no other institution is, with the 
mission of imparting sound knowledge and right guidance. 

Governments, like other human institutions, are modified 
from time to time, as are the conditions that influence them. 
New policies are adopted, new duties undertaken. But, 
as in every evolution, principles continue, and only their 
applications change. If these principles of our people are 
misunderstood, or if some of them are attacked through 
ignorance or passion or lust of gain, then imperatively must 
they be recognized and reestablished, not for themselves, 
— for they are imperishable — but for the safety of society. 
As in other ages, so now education must reflect the needs of 
the period. 

In popular conception, economics is a dry, even a depress- 
ing science. Sometimes, alas, writers develop an infinite 
capacity to make interesting things forbidding. For there 
are very useful and very fundamental truths of economics, 
as of politics, that as they touch the life of every citizen in 
a very realistic fashion, are, for that reason, of peculiar 
interest to him. Such truths lend themselves to a wealth 
of illustration familiar even to the very young. A boy or 
girl need not wait for the high school to know the difference 
between money and wealth, th^ absurdity of trying to create 
by legislation things that can be produced only by good hard 
work, the difference between liberty and license, the need 
of the expert worker in the expert's job, the inherent fairness 
of keeping faith on a contract freely made, — which is only 
a demand of decency that a man keep his promise, — the 
reasons both ethical and prudential why a citizen should 
consider the public welfare, the need of tolerance, the folly of 



INTRODUCTION V 

hysterical suspicion and wild accusation against any one not 
of his race or nation. Th^se are not things that need really 
be learned, for their truth and justice even the wayfarer 
knows, — rather they are to be related to the life of the 
people in this nation and at this time. Especially must 
our pupils feel deeply, as well as understand, the wickedness 
of any type of rule which would compel the tyranny of 
a minority, whether of birth or of wealth, or of a proletariat, 
or of any group whatever. 

A teacher who will use this text not as an added ''subject" 
but rather as a comment and a method of adjustment of 
present conditions made vivid by direct local references, who 
will apply some of it to the life in the classroom and the 
school, will find a ready means of enriching the composition, 
the arithmetical problem, the reading period, the discussion 
of current events. 

An appreciation of history, and in some degree of geography, 
can be facihtated by the use of this text material ; for train- 
ing in ethics and civics, the value of political and economic 
reference is obvious. 

Economics as a science has infinite applications, some of 
them exceedingly complex, and not a few of the subject 
disagreements among economists themselves. But it is 
only with simpler relations that our children need be con- 
cerned. As they learn the fundamental principles and be- 
come accustomed to apply them not only to school problems, 
but to those that are now demanding the attention of all of 
us, they will begin to interpret the repubhc not as document 
or a declaration, but as a place where men and women may 
live safely and happily only as they are willing to work 
together and to give some of their own thought and effort 
to welfare. For a society like ours cannot indefinitely 
continue to survive in an atmosphere of suspicion, of doubt, 
of class antagonism, and of individual aggrandizement. 



vi INTRODUCTION 

It is possible to conceive that the schools of an autocracy 
might be indifferent to matters poHtical, social, or economic. 
This cannot hold true of a democracy. For the life of a 
democracy depends upon intelligent teamwork. A man's 
first business cannot be to feather his own nest, or to take 
care of his own- health, or to provide for the enjoyment of 
his own leisure. These are all proper purposes in the edu- 
cational scheme, and all useful for the making of better 
citizens. But they do not in themselves insure good citizen- 
ship. The first business of the public school is to give to 
pupils that knowledge and understanding, and to inspire 
them with those motives which will make good citizens. 
A pupil cannot be a good citizen unless he believes that he 
must seek his own welfare only through the welfare of the 
group of which he is a part, and unless he acts upon his 
belief. It is not wholly a matter of good will: it requires 
understanding. To repeat, the important business of the 
school is to make the good citizen. This first, and all other 

things may come after. 

Albert Shiels. 

May, 1920. 



CONTENTS 

CHAPTER PAGE 

I. What Wealth Is i 

II. The Conditions of Wealth 7 

III. To Whom Wealth Belongs, and How it is Divided i 5 

IV. The Institution or Property 25 

V. Honest Money 34 

VI. Capital, Credit, and Interest 41 

VII. Labor and Competition 50 

VIII. The Grievances of the Poor 59 

IX. The Abuses and the Duties of Wealth ... 65 

X. Buyers and Sellers; or, The Mutual Benefit 74 
XL Employers and the Employed: Their Interest 

in Each Other 83 



ECONOMICS FOR UPPER 
GRADES 

CHAPTER I 
WHAT WEALTH IS 

" Wealth " has two meanings. The larger mean- 
ing comprises everything which makes men '' well off." 
Thus, a man's health, his home, his children, the 
salubrious climate, the air and the rain, the beautiful 
scenery of his country, are a part of his wealth. In this 
broad sense the man who enjoys life most amply, whether 
he has much or little property, is the most wealthy. 
In this sense, indeed, his best wealth may not have any 
money or market value. 

In the narrower sense, wealth is everything which has 
a market value, that is, which can be bought and sold. 
Houses, ships, lands, wheat, cattle, furniture, books and 
pictures, gold, silver, iron — such things constitute visi- 
ble wealth, which we can see and touch. If they were 
added together wherever they could be found, they 
would make the wealth of the Nation. 

Natural wealth. — There is much that is often called 
wealth which has no present market value. The fish 
on our shores, the wild lands, the timber in Alaska, the 
ores in the mines — these things of unknown value may 
sometime be wealth, but they are not wealth until they 
can be bought and sold. 



2 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

In the strict sense of the word, man always creates 
wealth — sometimes by his labor, as when he produces 
wheat or builds a house; sometimes by bringing a thing, 
Kke wild fruit, to market and offering it for sale; and 
again merely by claiming it as his own, as when a man 
fences off a piece of land in the wilderness, or discovers 
a mine. 

The public wealth. — That is not always wealth which 
costs money. Thus, a city may spend millions of dol- 
lars in building sewers or constructing streets. But 
the sewers and streets are not strictly wealth, since 
after they are constructed no one would pay anything 
for them. There may be pubKc works also, like jails 
and almshouses, in which wealth is sunk. The need of 
such things is a pubHc misfortune, and indicates the 
presence of poverty and crime. A nation that had 
quite outgrown the necessity for jails and almshouses 
would be far richer than a nation that had many costly 
buildings of this sort. A well man, who has no need of 
medicines, is better off than a lame or sick man who has 
to keep a supply of crutches and drugs. 

Wealth is likewise sunk in fortifications and war- 
ships. The nation would be richer if it had no need of 
them, as a man is better off if he needs no pistols to 
defend himself. 

Wealth in men. — There is wealth in horses or mules, 
because they can work, and can therefore be bought and 
sold, or hired. There was also wealth in men, for the 
same reason, under the system of slavery. A large part 
of the property of a slave State was in men. This kind 
of wealth did not disappear when the slaves were made 
free; free men own themselves instead of being owned 



WHAT WEALTH IS 3 

by masters. They can hire or sell their labor, their 
skill, or their knowledge. A man without owning any 
visible wealth may possess qualities in himself, such as 
experience and integrity, which will bring thousands of 
dollars a year. A State which has a plenty of such men 
will have all the visible wealth that it needs. Although 
wealth in men, that is, their labor and skill, can be 
bought and sold, so that a man with no money and a 
good trade is richer than an ignorant man with a thou- 
sand dollars, yet this kind of wealth is not generally 
counted. It is not shown in the census reports; in 
fact, it is not easy to measure it in money. Who can 
tell how much a bright boy or girl is worth ? 

Wealth in paper. — A man may have large wealth and 
never see it. Some of it may have been lent to farmers 
or to help build warehouses in a distant city. Some of 
it may have helped a company of men to build a mill, 
or a line of steamers, or a railroad, in a new State. Some 
of it may have been put into a bank, and then lent 
with other money all over the country. Some of it may 
have been lent to the government. Can you tell where 
it now is? While the rich man may not see anything 
that he owns, he has papers which show the amount 
of his wealth. Some of these papers are notes, signed 
by men who promise to pay so many dollars; or mort- 
gages on the farmer's house and land; or railroad bonds, 
which are notes of the railroad company; or certificates 
of so many shares in the mill or the bank; or bonds of 
the government, which are really a sort of mortgage 
upon all the property of the people; or paper bills, 
which promise so many dollars in gold or silver. 

This paper wealth, these bonds and notes and certifi- 



4 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

cates, may be bought and sold in the market, but they 
have no value in themselves; the country would not be 
poorer if they were burned. Yet they are often counted 
as so much wealth. Thus, the State of New York is 
said to have so many billions of dollars in visible wealth, 
and so many billions more in paper wealth. In this way 
the same wealth is often counted twice. The railroad-is 
counted once for its visible value in land, rails, stations, 
and cars; and then it is counted again for the paper 
bonds and shares, which merely show who its owners 
are. 

So with the mortgage on the farmer's land. It shows 
that for the present some one else owns part of the farm. 
Perhaps a savings bank has the mortgage, in which case 
the depositors in the bank have a share in the farm. 
We have seen that the government often attempts to 
tax the same property, first as visible and again as paper 
wealth. 

The wealth in paper may sometimes mean an addition 
to the real wealth of a State. Thus the people of Great 
Britain own a vast amount of wealth all over the world 
in lands and mines, etc. The bonds and paper certifi- 
cates show that the people in other countries are so 
much in debt to the people in Great Britain. So, also, 
the people of Philadelphia may hold paper bonds and 
shares in stores and mills in cities in the West, and the 
people oi other cities may own land and buildings in 
Philadelphia in the same way. 

False wealth. — There may be wealth, or things which 
can be bought and sold in the market, which harm the 
persons who use them. Thus, if ardent spirits hurt and 
degrade a community, the distilleries and saloons used 



WHAT WEALTH IS 5 

by the liquor business lessen the wealth of the people. 
Although, therefore, the national census of wealth may 
add hundreds of millions for the distilleries and saloons, 
a true estimate would subtract this value, since that 
cannot really be wealth which does not in some way 
make men better off. It is Kke a vicious animal which 
destroys every year more than his value. 

How wealth varies. —That which is wealth in one place 
may not be wealth in another. An acre of land in New 
York City may be worth milHons of dollars, but an acre 
of land in Greenland is worthless. What is a picture 
worth in Patagonia? Wealth depends on a market, 
or on the desire of men to buy and sell. Even the same 
market may change from one year to another. Thus 
London and New York are the markets of the world, 
where all sorts of things are continually bought and sold. 
But, in case of a great disaster, men's desire to buy and 
sell may suddenly be checked. In that case the value 
of many kinds of wealth falls, though the things them- 
selves remain. 

Robinson Crusoe's lands and goats, though precious to 
him, were not strictly wealth till other men appeared to 
purchase them, that is, to make a market. Even gold 
is not wealth on a lonely island, for one man alone has 
no use for it. 

Wealth is constantly being destroyed, or used up, or 
worn out. Some kinds, like food, are good only for im- 
mediate consumption. Clothing lasts a little longer, 
but soon has to be renewed. Houses and buildings at 
last go to decay. The gold and iron wear out. Per- 
haps one eighth of all the wealth in a country is used 
up in a single year. Among a poor or barbarous people 



6 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

the proportion is larger. The land is the one thing 
which remains the same; but its fertility may be ex- 
hausted, while the demand for it is constantly changing. 

The increase of wealth. — Although wealth is con- 
stantly being destroyed or worn out, it is also being re- 
created. The harvests of each year renew it; the labor 
and skill of millions of persons change the raw products 
into new and higher values, as in the case of a steel 
watch-spring, worth many times the cost of the crude 
iron ore. Even the land may increase in value by being 
tilled, or the growth of a city may give each square foot 
of land a greater value than an acre possessed before the 
city was built. Possibly half of the wealth of people 
who Hve in cities consists merely in the land upon which 
stores and houses are crowded together. The greater 
the city, the more the value of this land. 

The wealth of a people is thus like the body of a man. 
It is in a state of constant change or flux. It is always 
being renewed or made over. How much can you find 
that has lasted over fifty years? Thus, again, we find 
that the skill, the learning, the energy, the character, 
the ideals, and the purpose of a people — in other 
words, what education gives — constitute their real 
wealth. 



CHAPTER II 
THE CONDITIONS OF WEALTH 

If a household of children were rude and destructive, 
or had not learned how to use toys or articles of furni- 
ture, it would be impossible to keep anything of value; 
they would have no wealth. So with a savage people. 
As long as men were barbarous, the duties of business 
and property were extremely simple. The land be- 
longed to the whole family or tribe. There was little 
furniture in the rude tents or huts where the people 
lived together in alternate plenty and want. There 
was little or no barter or exchange of goods, and no 
shops or merchants, and for a long time there was no 
coined money. The chiefs lived much like the common 
people, as is still the case among the American Indians. 
As men came to live in cities, life grew less simple: all 
sorts of luxuries were demanded; various trades arose; 
and there became everywhere a wealthy class, living 
differently from their neighbors. The growth of cities 
brought travel, and therefore more trade, as the 
people of one place learned to desire the things which 
another place produced. There came to be great trad- 
ing cities, like Tyre and Carthage, which sent their 
ships beyond the Mediterranean Sea. 

Unfavorable conditions. — There were serious ob- 
stacles, however, in early times in the way of industry 
and commerce and the amassing of wealth. Some of 
these obstacles continue. 

7 



8 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

War. — There was almost constant war. A rich city 
was always Hable to be pillaged and burned. The cara- 
vans of merchants were likely to be attacked by robbers. 
Men had to defend themselves, or to obey ambitious 
kings, and they lived close to the line of famine. 

Piracy. — The seas were infested with pirates, - who 
saw no harm in seizing merchant ships, and selling their 
crews for slaves. Ships driven on shore by storm were 
mercilessly plundered. 

Slavery. - — Slavery also obstructed industry and busi- 
ness. The slaves did less work than free men could do, 
and the latter were less wilhng to work. There came 
to be a class of idle and unemployed people. 

Caste. — In some countries also, as in India to-day, 
there were castes, that is, classes of people, the mem- 
bers of which could not change their occupation. The 
son of a tanner had to be a tanner. Thus bright men 
in the lower castes were kept from rising. Ambition 
and invention were checked, and warriors were thought 
to be better than workers. 

Privileges and monopolies.^ — ^ Suppose a single fam- 
ily owned the only spring of water in a town and charged 
the others for the use of the water. This would be a 
monopoly. The old world was full of monopolies. The 
man who owns a valuable copper mine has a monopoly. 
He and the other owners of copper mines possess the 
privilege, since every one must have copper, of taxing 
all the people. In other words, they have a power and 
source of wealth which others lack. So the owner of 
valuable land, whose grandfather secured a title from 
the King of England, may do nothing himself, but live 
by the rent of his land. When a country has many 



THE CONDITIONS OF WEALTH 9 

people who possess privileges or monopolies which the 
rest of the people cannot enjoy on equal terms, there 
must be more or less hindrance to free industry and 
therefore to the growth of wealth. A few may be very 
rich, but the many may have to work for the few. This 
has long been the condition of England, Prussia, and 
other countries where land has been largely in the hands 
of the few. Monopoly of land is already a danger in 
the United States. 

The physical conditions of wealth ; the climate. — 
Certain countries, so far as we know, have never had 
any wealth. In the arctic regions, where the energies of 
man are nearly exhausted in the fight with winter, there 
could never be a rich civilization. Civilization has not 
flourished in the heart of Africa or under the equator. 
On the contrary, the richest nations dwell in temperate 
regions. The climate of a country is one of the condi- 
tions that help or hinder the wealth of a people. 

Natural resources. — Certain countries are poor by 
nature. The soil may be sterile, fuel may be scarce, 
the supplies of valuable minerals may be scanty. Other 
countries enjoy rich lands, ample forests and coal fields, 
vast water power, good harbors, and inexhaustible mines. 
The United States is thus magnificently endowed with 
the materials of wealth. China is another such coun- 
try which supports a vast population of industrious 
people. 

The spur of necessity. — Why is it that the beautiful 
islands of the Southern Pacific Ocean have Httle wealth ? 
The people are too comfortable to need to labor. The 
abundance of fruit contents them; the mild climate re- 
quires little clothing and makes unnecessary the build- 



lO RIGHTS AND DUTIES OF BUSINESS AND LABOR 

ing of permanent houses. We find few of the arts, or 
books, until men learn to work, and few would learn to 
work unless there were some necessity. 

As soon, however, as the conditions of living become 
harder — when fruits have to be cultivated; when cold 
and wet demand clothes for men's bodies; when men 
require shelter and permanent houses — wealth begins 
through the spur of necessity. Necessity teaches men 
to work, and all work requires more work to perfect and 
secure it. The field once tilled has to be fenced or pro- 
tected from wild creatures; the house has to be en- 
larged and improved; appliances are invented to save 
labor, and the inventions in turn demand new kinds of 
labor and new appliances, that is, more wealth. The 
introduction of the telephone into a town requires an 
increased force of men and women to manage the busi- 
ness, and the increasing numbers require more houses 
and more telephones. Even the effort to save labor 
presently calls for new- forms of labor and produces 
more wealth. 

The necessity to labor at first seems to be a misfor- 
tune. The long, cold winter requires fuel and hay, 
and more labor to supply these necessaries. A consid- 
erable portion of all wealth consists in wood, coal, hay, 
and substantial buildings, which the rigor of the climate 
demands. 

Everything that men esteem precious thus arises from 
some kind of necessity, either real or imaginary. The 
need of bread or shoes or tools stirs them to work to 
overcome the need, and thus to grow rich. Would you 
not rather live in the United States and have to work 
fo]' your living, than to live a lazy life in Tahiti? 



THE CONDITIONS OF WEALTH ii 

Intellectual conditions ; enterprise or energy. — There 
are some races, and certain persons in every race, who 
are more easily contented or more indolent than others. 
They do not keenly feel the spur of necessity. One 
condition of wealth, therefore, is energy or enterprise 
or will. The enterprising farmer will work more hours 
in a day, take better care of his cattle, provide warmer 
buildings, fertilize his land, and grow rich by his labor. 
The joy of life consists largely in doing things, in crea- 
tion, in working out plans. 

Intelligence. — An ignorant people have few wants, 
and therefore little wealth. An ignorant people could 
not have invented the steani engine, neither would they 
have felt the need for the articles which the steam 
engine helps to produce. It is only when the intelH- 
gence of a people rises to demand a vast supply of many 
things, that the new necessity urges inventors to harness 
the forces of nature to help them in shops, mills, and 
railroads. The single invention of the steam engine, 
called forth by intelligence, has increased the wealth of 
the world in a century more than it had grown in a 
thousand years. Science constantly brings to view new 
sources of wealth. 

Taste. — A certain portion of wealth is for enjoyment 
or decoration. Pictures, statues, beautiful buildings, 
instruments of music, the products of the various arts, 
constitute this kind of wealth. It arises from higher 
kinds of need, as men want satisfaction for their sense 
of beauty. As soon as a people have learned how to 
provide a sufficient quantity of food and clothing, a 
larger number of their skilled workmen are set free to 
produce and to cheapen the articles of taste. 



12 RIGHTS AND, DUTIES OF BUSINESS AND LABOR 

A multitude now have pictures, books, and pianos, 
which once the few rich people could hardly obtain. 
The more taste people have, the larger is the produc- 
tion of this form of wealth. The call for works of art, 
taste, comfort, and luxury requires more shops and 
houses, that is, greater wealth of other kinds. Even 
the taste for natural scenery adds a new value to rocky 
hills and wild shores, for which persons without taste 
would see no use. 

Moral conditions: honesty. — There are certain moral 
conditions of wealth. There will be little wealth if 
thieves and robbers are abroad. For men will not labor 
and gather abundance, if their riches are immediately 
snatched away from them. Neither will they have the 
heart to work, if the government is dishonest and takes 
their savings ruthlessly, as most governments used to do. 

Good faith or trust. — Wealth is daily changing hands. 
A vast portion of business consists in trade. Wool, cot- 
ton, and wheat must be brought from distant States and 
manufactured articles returned. But trade is impos- 
sible unless men trust each other. Trade is carried on 
in the faith that men will do as they promise, that they 
will pay for what they buy, that they will furnish arti- 
cles . as good as they promise. Even a few men who 
break their word injure business, cause distrust, and 
compel higher prices which the honest have to pay. 
On the other hand, if all men keep their word, more 
business can be donej at cheaper rates, and every one 
can have more wealth. We all gain or suffer together. 

A state of peace. — When the early colonists were at 
war with the French and Indians, their cornfields and 
towns were often burned and their ships captured. 



THE CONDITIONS OF WEALTH 13 

They could not make wealth in time of war. But as 
soon as peace returned, the French and the Indians 
helped them to get more wealth. The Indians brought 
them furs, and took cloth and iron in return. Their 
ships sailed to France, and both the French and the 
Americans profited by trading together. The Ameri- 
cans sold their furs and salt fish, of which they had 
more than they needed, and bought from France silk 
and other articles, such as they could not make so well 
as the Frenchmen. Trade made more wealth in both 
countries, but trade depended on the nations being at 
peace. 

Courage. — Sometimes vast amounts of wealth are 
suddenly swept away, as by a fire or a flood. These 
are the occasions for courage, not only at the time, but 
afterwards, when men must go to work to repair the 
damage or to rebuild a new and better city from the 
ruins, as the men of Chicago did after the great fire of 
187 1. In various industries, in the management of 
steam and electricity, on railroads and on ships, there 
is daily demand for the same kind of daring to take 
necessary risks and even to brave death, as used to be 
called for in the hazards of battle. 

In general, when men are friendly with each other, 
when their ships sail freely into all seas and foreign 
nations welcome each other to their ports; when many 
travelers go from one country to another and see what 
others can do better than they, this friendly travel and 
interchange help to make wealth. Men who see beau- 
tiful works of art return home with fresh zest for their 
own work. Men desire foreign fruits and products, — 
tea and coffee, pineapples and bananas — and bring 



14 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

them to our markets. New ships and steamers must be 
built to carry the trade of the world; new warehouses 
must be erected to accommodate the growing trade; 
more fields must be tilled and more mills built to make 
things with which to pay the people over the sea for 
what they send us. Wealth not only rests upon good 
faith and friendliness, but the getting of wealth brings 
distant peoples together, and teaches them to trust 
each other rather than to fight. We see thus how the 
whole world may some day become a cooperative Com- 
monwealth. 



CHAPTER III 

TO WHOM WEALTH BELONGS, AND HOW 
IT IS DIVIDED 

Labor alone does not make wealth, as some think. 
Wealth is partly natural, as the land, the fisheries, and 
the ores in the mines. Intelligence, skill, and taste are 
also necessary in creating and managing it. Public 
order is necessary; honest, industrious, and faithful men 
are necessary. If reHgion enhances the worth of human 
life, or furnishes motives for noble conduct, it also shares 
in creating wealth. Property is worth more in the 
United States, with its schools, benevolent institutions, 
and churches, than in Morocco or Siberia. 

The usefuL — If a colony of persons were to settle for 
the first time m a new country, and take up land and 
build towns, their wealth would rightfully belong to all 
who had been in any way useful to the colony. None 
of it would strictly belong to the idle, to the wasteful, to 
the injurious, if such were among the colonists. There 
are in every community various divisions of the useful, 
who ought to share in the wealth according to the part 
which they play in making it. 

Discovery or invention. — In a new colony there are 
certain persons who go out as pioneers or scouts to 
discover the natural wealth, the fertile lands, the fruits, 
the minerals, the springs, and waterfalls. If they do 
nothing but discover, and tell others where to go, they 

15 



1 6 RIGHTS AND, DUTIES OF BUSINESS AND LABOR 

deserve their share in the weahh which results from the 
discovery. 

The inventors are like the discoverers. Whoever shows 
a new use to which iron or copper can be put is as useful 
as if he discovered a new mine. Whoever invents a proc- 
ess or a machine to save labor, that is, to set workmen 
ree to do something else, to shorten the working-day, 
or to enhance the enjoyment of men's leisure, may be 
more useful than a thousand workmen. 

Production. — The largest part of the working-force of 
the community must be employed in producing food and 
all kinds of supplies. There must be farmers, black- 
smiths, carpenters and operatives in shops and mills, to 
make boots and shoes, clothing, tools, etc. Whoever 
produces something useful for the community ought to 
have a share in the wealth. Artists and painters belong 
under this head, if they add to the happiness of the com- 
munity. The domestic work done by women comes 
under the same head. The woman who cooks the 
man's food, or repairs his clothing, is as useful as the 
farmer who reaps the wheat. 

We observe various degrees of usefulness in men, from 
those who work by thousands with their hands to the 
highly skilled artisans, of whom there are never enough 
in a town. So among the workers of each kind we see 
difference of usefulness and worth, from those who labor 
awkwardly or without any interest, who waste the ma- 
terial and spoil the tools, up to the intelligent, effective, 
and enthusiastic men and women, one of whom can do 
three times as much in a day as his neighbor does. 

The work of distribution. — It often happened in the 
old times that there would be plenty of food in one 



THE DIVISION OF WEALTH 17 

place, while men were starving a hundred miles away. 
The farmer had no good roads over which to take his 
produce to market. In a civilized country, thousands of 
persons do nothing else but help distribute suppKes. 
The grocers do this on a small scale in every village. 
The great merchants do it by wholesale in the cities. 
Their agents travel up and down through the country, 
buying and selHng. 

Transportation. — Railroads and steamships, together 
with hosts of teamsters and draymen, distribute "the 
vast products of the Nation. Our railroads carry more 
than a billion tons of freight in a year. Express com- 
panies handle the more precious or perishable goods; 
the parcel post helps to bring butter and eggs to city 
homes. The farmer need not now stop working in 
order to go to market with his wheat. Milhons of 
passengers must also be carried, chiefly to their work 
and business, but also for pleasure. An army of men 
are detailed for conductors and brakemen, who also 
deserve to share in the wealth of the country. Horses 
and stables, automobiles and garages, must be kept and 
more men employed to take care of them. 

Protection. — The duty of protecting against violence 
and fire cannot be altogether committed to the govern- 
ment. There must be private watchmen in stores and 
mills. There must be patrols on the railroads to pre- 
vent accident. Whoever prevents injury ought to share 
with those who produce the wealth. The physicians 
and nurses, who defend us against disease, claim a right- 
ful share. 

Administration and accounts. — The business of the 
community needs a certain class of skilled men to manage 



1 8 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

and direct. The able management of a first-rate en- 
gineer, architect, or superintendent may save the labor 
of hundreds of men, while poor and shiftless management 
daily causes enormous loss. The administration of 
business needs also a force of accountants, stenographers, 
and bookkeepers in offices, factories, banks, and ware- 
houses. There must be trained heads to superintend 
accounts and make a multitude of figures tell the truth, 
or else, through error or fraud, injustice will somewhere 
be done, or supplies will not be properly distributed. 

Economy; savings. — Economy is the care of values. 
There are numberless holes or leaks through which 
wealth is wasted by ignorance or carelessness. Whoever, 
therefore, saves wealth, whoever stops the leak, whoever 
keeps what another would lose, becomes a helper to the 
Nation. A housekeeper, for instance, may save enough 
food, which another would throw away, to feed one or two 
mouths. This is the same as producing the food. The 
larger one's responsibility is, the greater the opportunity 
for wise economies, saving perhaps billions in value to the 
Nation and making every one better off. This is con- 
servation. 

Instruction. — There must be plenty of persons de- 
tailed to the service of education. Whoever teaches, or 
waits on the teacher, or learns the facts of nature or 
history, or makes books, helps make wealth and deserves 
a share in it. There must also be libraries and museums 
with their attendants. So too, whoever teaches the 
laws of faithful conduct, or the principles of a humane 
religion, so as to help men become more just, patient, 
brave, and friendly, is a worker and sharer with the direct 
producers of wealth. 



THE DIVISION OF WEALTH 19 

Comfort. — A man who has a comfortable house or 
lodgings will do more work than if he is badly housed. 
In a civilized country numerous appHances exist purely 
for comfort. A large part of woman's work is to promote 
and increase comfort. In general, whoever can help 
make men more comfortable at their work, or in their 
homes, whoever can lessen drudgery and render labor 
more pleasant, deserves a share in the wealth. 

Recreation. — Every one needs, not merely rest, but 
sometimes amusement or play. Men who work hard, 
like children who study, need vacation; they will do 
more if they have it. Here is the need of another body 
of workers, some of them to carry on work while the first 
set have their rest; others to entertain and amuse. 
Extra cars and steamboats must be run for holidays and 
picnics; we must have musicians, singers, and actors; 
there must be hotels and restaurants. The producers 
must turn out a larger supply of goods so as to share with 
those who give them recreation. 

Personal and domestic service. — There are persons 
who need help and service. Some of them are sick or 
aged, and cannot help themselves. Others are tired or 
overworked and require temporary assistance. In many 
households extra help is needed for the little children. 
There are also those whose time is extremely valuable 
in behalf of the nation. Would you have a great en- 
gineer like de Lesseps, a scientist like Darwin, an in- 
ventor like Edison, a wonderful painter or singer, the 
President of the United States, wasting his time and 
strength in sawing wood or shoveling coal ? We are glad 
to allow certain persons extra service, provided they need 
it, or by reason of the superior value of their work. 



20 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

We grudge this kind of help, however, where it is not 
needed or deserved. We grudge it to a young person who 
had better wait on himself than be waited on by another. 
We grudge it to the indolent, who are harmed by it. In 
the new colony which we have imagined, in which we 
should need every skillful hand, we cannot see why an 
idler or his valet should share in the wealth created by 
the useful people. 

Luxuries. — There are articles like sweetmeats or 
jellies of which there are not enough to go around, or at 
least not for common use. Because they are compara- 
tively scarce they are more costly than the necessaries or 
comforts, of which there may be enough for all. Many 
luxuries depend upon the cultivation of people's fancy or 
taste, and are not luxuries at all to those whose taste is 
not cultivated. A gem or a work of art might not be a 
luxury to a savage. There are luxuries which seem suit- 
able for a feast, when we entertain friends, which would 
not be wholesome for ordinary use. There are other 
luxuries which we set apart for the sick or the aged, the 
use of which might be enervating for the young and 
healthy. 

We have spoken of the need of extra personal services, 
in order to save valuable time or life. There are other 
luxuries, like travel abroad, or big houses, or horses and 
carriages, or costly dress, which we cheerfully allow to 
men and women whose lives are specially useful, who 
require spacious rooms for study and books, who repre- 
sent the hospitality of a city to distinguished strangers, 
or whose services may be prolonged by extra care. In 
other words, there may. be lives for which the com- 
munity does well to make special provision and give 



THE DIVISION OF WEALTH 2i 

ample salaries, as we give particular care to rare, valuable, 
or delicate tools. What shall we say, however, of those 
who are lavish in their use of luxuries, when the neces- 
saries of Hf e are scarce and costly ? The empire of Rome 
was on the way to ruin while the rich rioted in luxury and 
the poor starved. 

The family. — A considerable part of woman's work 
must be directly for the family, and particularly in the 
nurture of children. The health, the morals, and the 
working power of a people are high or low in proportion 
to the character, the care, and the wisdom of its mothers. 
Whoever takes care to make the children stronger or 
better deserves a share of the wealth. The saving of a 
single dehcate child, like Sir Isaac Newton, may con- 
tribute to the State more than money can pay for. 

The divrsion of labor. — In a poor or unciviHzed coun- 
try the same person carries on various kinds of work. 
The farmer is his own carpenter and blacksmith; spin- 
ning and weaving go on in the same house. As fast as 
men learn to help one another, they divide their work 
into trades and professions, so that each shall do what 
he can do best. Thus each useful worker fits into his 
proper place and the total product is increased. 

It is possible to carry this division of labor too far. 
We do not live to produce wealth, but we produce wealth 
in order to live better, that is, more happily. It cannot 
be good for a man to become a machine and to do 
nothing all day but poKsh the heads of pins. If he does 
this for part of the day, give him also opportunity to 
work in his garden and to see his fruit and flowers grow. 

The division of wealth. — We have seen that wealth 
ought strictly to belong to all who are useful to the 



2 2 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

community. How shall we apportion it exactly ? Some 
men are more useful than others. Some are useful for 
a time and less useful afterwards. Some have greater 
needs than others. An artist, a student, an architect 
has needs different from a farmer. We cannot tell 
precisely how useful one is as compared with another. 
A distiller of strong drink may not be useful at all. A 
skillful teacher may be more useful than anyone knows. 
Good fortune may increase or lessen the usefulness of 
the farmer or the fisherman. No tribunal of men is wise 
enough justly to divide the income or the wealth of a 
people. It would not be fair to divide equally, for all do 
not work equally hard, or need the same amount. Even 
at the same table one eats more than another. It would 
not be just to let each take what he wishes; for many, 
like young children, are greedy and wasteful. If a city 
or country contrived to divide its income equally among 
its citizens, what should in fairness be done with the 
people who would immediately flock in from poorer 
or barbarous countries to share in the wealth of the 
richer place ? 

The law of supply and demand. — The way in which 
wealth is now roughly apportioned is according to the 
rule of supply and demand. If, for example, coal is 
scarce, and the demand for coal is great, the natural 
rule is that a man must work more hours, that is, pay 
more to get his share of the coal. If flour is abundant, 
less labor wifl buy it and there wifl be more time to pro- 
vide other things. If carpenters are numerous and 
farmers are few, the carpenters' pay will be small; that 
is, they can have less flour or coal, or whatever else they 
need. If, on the other hand, there are few carpenters, 



THE DIVISION OF WEALTH 23 

and every one wants their work, they will have large 
pay. 

The law of supply and demand works on the play- 
ground as well as in the market. If there are few boys 
to play on the school team, even poor players are wel- 
come; if there are plenty of boys, the poorer players 
have to stand aside, or make up a team by themselves. 

The law of supply and demand discovers some articles 
to be more useful or valuable than others, and certain 
men and women to be more useful than others. It works 
to bring the less valuable things within reach of every 
one, but makes the scarcer things, like luxuries, expen- 
sive. It gives to the many persons whose work is less in 
demand, or less useful, whose places could readily be 
filled, less of the wealth, and more of it to those who are 
specially necessary to create the wealth. Men have not 
yet found any other rule than this by which to divide 
wealth. 

The law of supply and demand is a law of things, not 
of men. Like the fire or the steam, it makes no allow- 
ance for men's feehngs and needs. The law of gravita- 
tion does not protect a falhng body from hurt; so the 
law of supply and demand by itself does not save men 
from starving. It works out only a rude kind of justice. 
But mere justice, without sympathy, pity, consideration, 
and friendHness, is harsh and often cruel. 

" Laissez faire,'' — These French words mean: " Let 
things take their course," or " Let the law work itself 
out." Thus hard-headed men say, "Let the rule of 
supply and demand alone; do not meddle with it." 
But we do not let a river take its course; we try to con- 
trol it. We construct airships and fly in the face of 



24 RIGHTS ANt> DUTIES OF BUSINESS AND LABOR 

gravitation. So we cannot bear to let the law of supply 
and demand work out starvation for our neighbors. We 
have to learn to use and control it. In fact men interfere 
with it constantly for selfish ends. They pass tariff 
laws and inheritance laws which prevent the natural 
working of the law of supply and demand. Government 
exists to help and protect its weaker members, not to 
help the strong to get or keep more than their share. 
The modern commonwealth therefore proposes to supple- 
ment the law of supply and demand by a watchful 
humanity. 

As on the ball ground the better and stronger fellows 
try to make room for the poorer and younger, and to 
teach them to play better, so it is part of the business of 
the abler and stronger men in a State to make room for 
the less capable and intelligent and to enable all to 
prosper. We shall speak further of supply and demand 
in another chapter. 



CHAPTER IV 
THE INSTITUTION OF PROPERTY 

We can imagine a people holding their wealth in com- 
mon, as a club of schoolboys own their bats and balls 
together. Among a savage people like the North Ameri- 
can Indians, a considerable part of the wealth is common. 
The tribe holds the cornfields. When game is taken, all 
the villagers share; a number of families will often live 
in the same house. As long as anyone has food, his 
neighbors, or even strangers, will come and eat. 

Difficulties in holding wealth in common. — There 
can never be much wealth in a savage tribe. There is 
little encouragement to enterprising members of the 
tribe to work hard and lay up stores of provisions, where 
the lazy and improvident come in freely to devour and 
waste. Few would build new and better houses, or take 
the trouble to have a nice garden, or to plant orchards, 
unless they could hope to enjoy the reward of their work. 
Men who hold things in common are like children playing 
with blocks. No child can build up while the others 
pull down. No considerable work can be carried on 
where people have no sense of responsibiKty. Now, the 
best way to learn responsibiKty is to trust to each his 
own task or ofhce or tools or garden. 

The beginnings of property. — Property is that which 
is one's own, which no other person has a right to take 
away. Property begins even among savages, as it begins 
among children. Thus one's clothes are one's own. It 

25 



26 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

would be inconvenient for more than one person to claim 
the same clothes. So of one's implements and weapons, 
the axe or the bow and arrows, especially such as one 
makes himself. So of the ornaments and decorations, 
the shells or gems, or bits of metal that one finds. 
" These are mine," says the child, and every one recog- 
nizes the child's right to them. So of the Arab's horses, 
which he has reared and tended, or the flocks which he 
pastures. 

Differences of men in tastes and capacity. — Property 
grows out of our differences of taste and capacity. One 
is fonder than another of shells or bright colors, and 
takes more trouble to collect them. One cares more 
than another for horses or cattle, and has better success 
in raising them. One is fond of ornaments, and carves 
a beautiful handle for his axe or knife, while another does 
not think the carving worth while. The ornamented 
axe is the property of the man who had the taste and skill 
to make it. One man loves books and pictures, and is 
wilHng to work a longer day to obtain them. They 
ought to be his, rather than another's who does not care 
for them. 

Property by earning. — Suppose that a man enjoys 
working for some one else who will direct his work. A 
man with a herd of cattle hires him to help take care 
of them, and pays him in cattle or skins or money. 
Here is property in what a man earns by his labor or 
skill. It rightly belongs to the man who has worked for 
it, and not to others who have not worked. Would it 
not promote laziness in the men who did not work, if the 
cattle or the money for which another had worked were 
shared with them? 



THE INSTITUTION OF PROPERTY 27 

Property by exchange. — Suppose the man with the 
herd of cattle exchanges some of his steers, or some gems 
that he has found, for a supply of wheat. This, too, is 
his property. It could not rightly belong to others who 
sat still and did not help pay for the wheat. It would 
hurt their character to claim what they had not helped 
to produce. 

Property by gift or inheritance. — It is surely fair for 
the man who has wheat or horses to make a gift to his 
friend or his son. The gift then becomes the property 
of the friend, and not of anyone else. Much wealth is 
thus handed down from parents to children, and belongs 
to the children by inheritance. May it not, however, 
be possible that our laws give extravagant protection to 
property of this sort? 

Property by natural genius. — Suppose a man has 
genius to invent a useful machine, or to write a valuable 
book, or he has a beautiful voice, or he plays the vioHn. 
What anyone can make or do is his property in the same 
way as his eyes or his hands are his own. It would not 
be right for the family or the Nation to claim this man's 
genius, or compel him to write books, or to sing for them 
whenever they pleased. The rewards or the pay which he 
receives in return for his genius are fairly his. Others 
have no claim to compel him to divide with them. 
Nor would it be honorable to make such a claim. On 
the other hand, would it not be shameful in him to with- 
hold the gifts of his genius, or to extort unreasonable 
pay? 

Property by accident or good fortune. — If a fisherman 
has a lucky catch, we say it is his. The unlucky fisher- 
men, or those who do not go fishing, have no claim to 



28 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

share his good fortune. Let them take their turn at 
fortune another time. Men enjoy their fishing better, 
and they are more watchful and daring than they would 
be if their fish were taken from them and divided among 
the neighbors. 

Suppose, however, the man finds a gold mine. Ought 
it wholly to belong to him ? He merely found what he 
never created. Is it not enough if we make good to him 
for his lucky discovery, and then take the mine for the 
use of the State ? Would not a good citizen prefer this 
disposal of the mine ? 

What, now, if a man has property, such as wheat, or 
bank stock, which rises suddenly in value. We call this 
increase his property, although he may have done nothing 
to earn it. Since he has to bear the loss when his wheat 
or his stock falls in value, it is right that he should enjoy 
the exceptional advantage when the value rises. In the 
long run, he is apt to lose as much as he gains in this way. 

Suppose, however, a man's land rises steadily in value, 
while he does nothing to add to its usefulness? This 
happens in a growing town or a new commonwealth. 
People pour into the town who need land and farms. 
The land owes its increase of value to the coming of 
these new people. Does a good citizen wish to grow 
rich in this lazy way, without giving any service for what 
he gets, or sharing the increased value with his fellow 
townsmen ? 

Property by possession. — Suppose one found some of 
Captain Kidd's treasure : it would be impossible to re- 
store it to its rightful owners; it would, therefore, be 
the property of its discoverer rather than of any other 
man. So, also, in case one had inherited property 



THE INSTITUTION OF PROPERTY 29 

from an ancestor, who had made his money by fraud, 
or by the African slave trade. It would still be the man's 
property, since no others could rightly claim it. Would 
it not, however, be fair if the Government levied a heavy 
tax on such pieces of property as these ? 

Property in land. — Such property as may be removed 
— clothes, furniture, ornaments, cattle, produce, money, 
etc. — is called personal property. This includes paper 
and certificates of property, such as bonds and bank 
shares. The most important kind of property is land. 
The land and the buildings upon it constitute '' real 
estate." What gives anyone a private right to own the 
land? It is not property that is, a man's own, in the 
same sense that the things which he has created are 
his. 

When Robinson Crusoe came to his lonely island, al- 
though savages sometimes roamed over it, they were not 
using it, and did not rightly own it. Crusoe accord- 
ingly took what he needed for pasture or for tillage and 
garden. Suppose that another ship were wrecked on 
the island, and its crew came ashore. It would not 
be fair for him to claim the whole island, and to make 
them pay him for the wild land ; nor, on the other hand, 
would it be fair for them to take from him the land 
that he was using. The land was his to hold and use, 
but not to own against the welfare of others. 

Suppose, after the best land had been taken up, 
another company of men came ashore. It seems hard 
that they should not have as good land as the earlier 
comers; but it would not be right to demand the 
fields already occupied, cleared, and improved. When 
strangers come late to the table at the hotel, it will be 



30 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

friendly in those who are seated to move closer and 
accommodate the later ones, but otherwise must they 
not wait for the second and possibly poorer table ? 

As long as there is plenty of wild land, as there once 
was in the United States, there is little difficulty about 
the ownership of it. So, if every one used his land, 
having got it fairly in the first place, there might not be 
any question about its rightful ownership. But suppose 
the land was acquired in war or by violence; or by 
injustice, as when the Highland lords in Scotland dispos- 
sessed the clansmen of land which rightfully belonged to 
all the tribe; or by a fiction, as when the king of England 
granted or sold vast lands in America which did not 
belong to him. 

The laws and custom have allowed men to take up and 
hold more land than they can use, and to keep it unem- 
ployed when others need it. This cannot be right. 

When wrongs have been done, it is hard to right them 
at once without doing more wrong. For the present own- 
ers of the lands that were once wrongly acquired may 
have honestly paid for them, and may really use them. 
We do not wish to take anything which our fellows have 
paid for without making compensation, or to change the 
laws about holding and taxing the land, except with 
regard to the welfare of the whole people. Here is a 
great question to think about. Is our custom of per- 
mitting unlimited property in land a public advantage 
or not? Suppose there is more enterprise and better 
care of the land when men are free to acquire and use it 
as they please; even so, it can never be right that in- 
dividuals shall hold great tracts of land as their exclusive 
domain, while millions of others have no land. 



THE INSTITUTION OF PROPERTY 



31 



The right of eminent domain. — Property in land is 
in fact always held subject to the needs of the State. 
Thus, if the government requires a piece of land for 
public buildings, if a new street or a railroad needs to 
be laid out through a man's farm, the individual cannot 
keep his land in the face of a public necessity. He is 
simply entitled to fair compensation so as to save him 
from actual loss. 

Corporate and common property. — There is much 
wealth owned by persons in common. Thus, several 
farmers may own a threshing-machine or a creamery. 
A number of persons may unite in establishing a savings 
bank or a factory; they constitute a corporation. All 
the people of a town or city own the public buildings 
and schools, the parks and the streets. Every new- 
comer who is enrolled as a citizen, and every child born 
in the city, becomes a sharer in this property on equal 
terms with the rest. So with the property of the State, 
in which every citizen is a sharer. So with the property 
of the Nation, including great tracts of lands and forests 
and water power in the Territories. Our Government 
claims such lands as belonging to the American people, 
and not to people in Asia or Africa, because the land 
is within our boundaries; as a farmer claims land for 
which he holds a title. The Nation thus becomes re- 
sponsible for the care and proper use of this public 
domain, poHces it, and provides against fire and other 
kinds of waste. 

All may too become sharers in the knowledge, the 
inventions, the discoveries, by which each generation 
inherits the labor and thought of all previous time. The 
value of this common knowledge is immeasurable. 



32 RIGHTS AND, DUTIES OF BUSINESS AND LABOR 

Property and the public interest. — We respect private 
property for two reasons. One reason is our regard for 
the individual. We respect his claims to his various be- 
longings and earnings as we wish our own claims to be 
considered by him. A second reason is the public good. 
There will be more work, industry, energy, and thrift, if 
individuals have freedom to own and use and give away 
their property, than if we forbid them to have anything 
of their own. This is the experience of mankind. It is 
the same in a nation as in a family. The whole family 
will have more- if each member can make and hold his 
own things, than if no one can call anything his own. 
So the community will create and possess more wealth, 
and all will therefore be likely to be better off, if each is 
reasonably free to acquire and hold property, than if all 
the property were held in common. We presume, how- 
ever, that the individual gets his property honestly and 
not at the loss of others. To get property honestly 
means usually to get it by some kind of useful service. 

If we discover any kind of property — turnpikes, 
bridges, waterworks, or railways — which, in view of the 
common welfare, individuals or companies had better 
not continue to hold privately, the individuals, in such 
case, ought to consent to let the public acquire it, in such 
a way as to do no injustice to the present owners. 

Responsibility for property. — We have seen in gov- 
ernment that an official does his work best when he is 
directly responsible for his conduct. So, a reasonable 
regard for private property works to make each person 
responsible for what he has. He learns about values, 
and what wealth is for, and how much effort it costs to 
earn a dollar. If the boy has his own clothes and hat, 



THE INSTITUTION OF PROPERTY 33 

he and no one else will be bound to take care of them. 
If he has his allowance, he will be bound to keep account 
of it, and not to waste or lose it. So if a man has his 
own property, he learns to use and save it. If he has his 
own land, he is responsible for the care he takes of it; he 
will take pleasure in tending and beautifying it; he will 
be likely to put permanent improvement upon it, in 
clearing and draining it; he can afford to build a sub- 
stantial house, where an Arab would only set up a tent. 
To respect a man's property is thus to make him respon- 
sible for it; and responsibility develops his character 
and makes him more of a man. If he is a good steward 
for his own property, he learns to be a good steward for 
the pubhc property. Whereas if he is too slovenly to 
take care of his own, he would be unlikely to take good 
care of the common property. 



CHAPTER V 
HONEST MONEY 

Men do not trade together long before they invent 
something to measure the value of wealth. Money is 
that by which they make such measurement, as they 
measure distance by the length of a pole, or by a yard- 
stick. They begin with rude kinds of money, such as 
wampum or beads or cattle. Thus an American Indian 
would sell a valuable package of furs for strings of wam- 
pum. The precious metals, and especially silver and 
gold, have been the chosen forms of money among 
civiHzed nations for thousands of years. In early times 
the money was weighed. Afterwards it was coined; that 
is, a bit or piece of a certain weight was stamped by the 
sovereign or the government. 

Changes in the value of money. — It would be con- 
venient if one kind of metal had always had uniform 
value. But there is no such metal. The supply of gold 
or silver, like the supply of other things, varies from one 
time to another. The opening of new mines and fresh 
discoveries of precious metals tend to lower their value, 
as a large harvest lowers the price of wheat. On the 
other hand, increasing trade causes a demand for more 
money, and tends to absorb the supply. Ignorant 
people, as in the Orient, often hoard or hide their 
money; this money " goes out of circulation." There is 
a changing demand also for gold and silver for other 

34 



HONEST MONEY 35 

purposes besides money, as for articles of ornament or 
luxury; thus much coin is melted down every year and 
ceases to be money. For various reasons the same 
amount or weight of gold or silver will not, therefore, buy 
as much at one period as at another. Probably a dollar 
in gold never bought so little food or paid for so little 
work as now. 

The double or single standard of value. — It has been 
common to use both gold and silver money, though un- 
fortunately the two metals vary with respect to each 
other, like all other values. Thus, gold is estimated to 
have been worth eleven times as much as silver in the 
fifteenth century, fifteen times as much at the close of 
the eighteenth century, and more than eighteen times 
as much in 1879. There have been further changes since. 
Thus, the silver in a dollar may not now buy one hundred 
cents' worth of labor or produce. 

A moral question. — When the Government stamps a 
coin and makes it " legal tender," that is, good money 
to pay debts, the stamp is a guarantee or pledge that 
the coin has as much value as it says on its face. Thus, 
the gold eagle says, " I carry two hundred and fifty eight 
grains of gold." But if the Government should make 
eagles with one-fifth less gold than before, and still mark 
" ten dollars " on them, they would not tell the truth. 
Every one who had promised to pay a thousand dollars 
could use the cheaper coin to pay his creditor. But sup- 
pose, when the debt is due, the gold coin is a fifth harder 
to procure than when the promise was given; ought the 
creditor to be willing to accept fewer dollars? This may 
happen, without the interference of a government, but 
by a slow change in conditions of business. 



36 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

The money of commerce. — Governments coin money, 
but the commerce of the world fixes its value. For 
commerce, in her great markets, like London and New 
York, where the business of the world meets and is 
settled, asks of all commodities, and the coins of every 
nation, What is their worth ? A government may put a 
false mark on a coin or mix alloy with the metal, but 
commerce weighs and tests the coin, and will not give 
more than it is worth. 

For the present, the standard of commerce seems to be 
gold. This is because the great commercial nations use 
this metal in settling their accounts. Even when they 
use silver coinage along with the gold, as a matter of fact, 
they refer their values to the gold basis. Thus the 
United States counts values, not in silver dollars, worth 
in weight of silver less than a dollar, but in gold dollars 
corresponding to the pound sterhng of London. When 
money has to be sent back and forth between nations, 
the gold is more convenient, being less bulky. 

Paper money. — Although a dollar means a certain 
weight of precious metal, most of the money in use con- 
sists of paper bills. There is, in fact, risk and inconven- 
ience in carrying coin, and especially in doing a large 
business with it. If all the wheat and cotton of the West 
and South had to be paid for in metallic money, there 
would be great cost and loss, merely in sending the vast 
weight of coin thousands of miles. CiviKzed men have 
therefore invented paper money of various kinds as a 
substitute for coin. A large part of the paper money in 
use is issued by the National Government. 

Bank bills. — A bank bill is really a printed promise 
or order for coin. The bank will pay you the coin if 



HONEST MONEY 



37 



you prefer it to the paper. As long as men believe that 
the bankers will keep their promises, and pay the coin 
when requested, they do not care for the coin, but find 
bills more convenient. In order that the people may be 
protected from loss, it is the custom for the Govern- 
ment to superintend the banks which issue bills. They 
are not allowed to issue too many bills ; that is, to make 
more promises than they are able to keep. A great 
system of Reserve Banks estabhshed by act of Congress 
holds the banks together and helps to keep the credit of 
each bank sound. 

Checks and drafts. — Besides bank bills there are mil- 
lions of money in private paper orders which are sent by 
mail, or pass from hand to hand. Thus, a merchant in 
New York, instead of sending a great roll of bills to pay 
for lumber or iron, deposits the money in a banlc, and 
writes a check or order upon the bank for the amount of 
his debt. If the merchant is honest, the check is the 
same as money, and another bank in Michigan or Ten- 
nessee will accept it from the lumber or iron dealer. Or, 
a merchant in New York, wishing to pay for his goods in 
Bordeaux, will get a draft or order for so much money 
from a banker in his own city upon a banker in Paris or 
London. This draft upon a well-known and honorable 
bank will be as good as money anywhere in the world 
where ships go. Thus orders for money become them- 
selves a kind of money. The orders may even be sent 
by telegraph over the continent or under the ocean. 
Thus a bank in Chicago, which is known in Rome or 
Petrograd, may telegraph an order to pay some American 
student money which the boy's father had deposited in 
his bank at home. 



38 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

Government and paper money. — The Government of 
the United States borrowed on an enormous scale to pay 
the expenses of the Civil War. Besides other methods 
of borrowing, hundreds of millions of dollars in bills were 
issued. These bills were the promises or pledges of the 
Government to pay as many dollars in coin as was printed 
on the face of the bill. The bills were used to pay for 
supplies and the wages of soldiers. The Government, 
however, was not able for a time to keep its promises and 
to pay specie, that is, the coined money of commerce, to 
merchants and others who wanted it. On the contrary, 
the quantity of paper notes was so great that some feared 
lest, as in the case of the continental currency of the 
Revolutionary War, the bills would never be paid. It 
happened finally that almost three paper dollars were 
required to get the value of one gold dollar. The value 
of the paper dollar varied with every victory or defeat of 
the national arms. The gold and silver were hoarded 
away or sent abroad to pay the merchant's debts. 
This was because the paper dollar no longer told the 
truth. 

Specie payments. — After the Civil War, as soon as 
confidence was restored that the Government could keep 
its promises, the paper money rose in value. The yard 
of cloth that had sold for nearly three dollars could now 
be had for, perhaps, a dollar and a quarter. At last the 
Government resolved to make the paper dollar tell the 
truth again. It was announced that anyone who wished 
might have gold coin at the Treasury in exchange for the 
paper bills. But very few persons now desired to draw 
the bulky gold, since the paper dollar at once became as 
good as the gold to buy the yard of cloth. 



HONEST MONEY 39 

Gold and silver certificates. — Besides the notes of the 
Government, or its promises to pay, other bills or certifi- 
cates have been issued which entitle the holder to so many 
gold dollars, and again another class which entitle the 
holder to so many silver dollars, deposited in the Treasury 
vaults. These certificates are also as good as money, and 
much more convenient. 

A national danger. — Our Government has, first, gold 
dollars which correspond to the money of commerce, 
containing the precise value marked on the face of them ; 
second, silver dollars, stamped by the Government, but 
containing less than their value; third, silver and nickel 
currency, used merely for convenience, but not contain- 
ing nearly the worth stamped upon it ; and, fourth, paper 
notes and certificates, worth nothing in themselves, but 
guaranteed by the wealth and honor of the Nation. 
These different kinds of money circulate together as long 
as the Government honestly keeps in its vaults sufficient 
gold coin — the money of commerce — to enable every 
one who has silver or paper dollars to come and get an 
equal number of gold dollars, if he needs them, to pay for 
goods abroad. If, however, at any time, the Govern- 
ment should refuse to give the merchant the real value in 
gold in exchange for the silver or the paper, the same 
thing would happen as in the Civil War : the silver dollar 
and the paper would cease to tell the truth; the yard of 
cloth would rise in price; all values would change. 

It would be precisely as if the Government, like the 
despots of old times, clipped the coin or mixed alloy with 
it, so as to make a new dollar of less worth. The true 
dollars, such as the commerce of the world buys and sells 
with, part company with the false or debased dollars, and 



40 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

disappear from the hands of the people whose govern- 
ment does not keep its faith or make its money tell the 
truth. 

We see here how war tends to unsettle values. While 
multitudes of men are drafted away from the usual in- 
dustries, the labor of others becomes scarce and prices 
rise. While immense sums of money are borrowed and 
spent, the dollar cannot buy as much as before. 



CHAPTER VI 
CAPITAL, CREDIT, AND INTEREST 

Suppose a number of men go on a fishing voyage. 
It is not enough to possess skill and strength; they need 
boats, fishing tackle, and a stock of provisions to live 
on while they are gone. The wealth required to begin 
an enterprise, or to carry work through, is called capital. 
Thus a farmer, if his land were given him, would still need 
farming tools, cattle, and provisions enough to support 
him till he got his first harvest. He would presently 
need capital to build a new barn. In the case of a great 
enterprise, a factory or a railroad, an enormous capital 
must often be laid out to purchase materials and hire the 
labor of a large body of men before any return is made to 
those who expend their capital. 

A poor or barbarous people make Httle progress, be- 
cause they have no wealth or capital with which to buy 
material and tools or to feed and clothe workmen. 
Where every one is poor, men have to supply their own 
daily necessities. There must at least be an accumula- 
tion of food before great works can be undertaken. 

The accumulation of capital. — Whoever produces or 
saves more than he consumes accumulates capital; for 
example, a farmer may produce food enough for a dozen 
families, or a shoemaker can make shoes enough for 
a neighborhood. Wherever men labor, their industry 
accumulates capital, or produces and lays up a supply of 
produce or material to be drawn upon for further work. 

41 



42 RIGHTS AND DUTIES OF BUSINESS AND LABOR' 

In the most simple society, the harvest of each year is 
the capital to provide against the needs of another year. 

The use of machinery, and especially of steam, water, 
and electric power, enables a few workmen to do the 
work of armies of men, and so to accumulate capital on 
a grand scale. 

Credit. — A man does not always need to have accu- 
mulated capital himself. If he can work and is honest, 
he may find some one willing to make him a certain 
advance of money or provisions on the expectation that 
he will do work or business enough to repay. The 
amount of this advance is called his credit, and depends 
upon his ability and character. If he is a skillful fisher- 
man, he may find some one who will lend him a boat. If 
he has at the same time a piece of property, a house, or a 
lot of land, his credit will be greater; some one may trust 
him with money to build a larger boat. Perhaps an in- 
dustrious shoemaker, who has saved a thousand dollars, 
thus becomes a silent partner with the fisherman, and 
both get on better by this cooperation. 

So, a farmer owning his land and buildings may not 
only work his farm, but through his credit obtain addi- 
tional capital to make improvements and increase his 
products. Or the owner of a mill may go to the bank 
and get money to buy raw material or to expend in wages 
to his men till his returns come back from the sale of his 
goods. All this is made possible by credit, or the trust 
which men repose in one another's good faith in keeping 
their promises. The more honest men are, the more 
credit there is and the more work can be done. 

Corporations. — Many individuals, each with small 
earnings or savings, often combine together, and trust 



CAPITAL, CREDIT, AND INTEREST 43 

their capital to directors or trustees who manage for all as 
they would for themselves. Thus masses of capital may 
be employed to better advantage than a small capital, 
in using machinery and paying many workmen, so as to 
produce more and to effect greater economy. Railroads, 
gas companies, cotton mills, savings banks, and many 
other corporations are formed by this kind of union 
among many individuals. These corporations for mass- 
ing and using capital are only made possible where there 
is a considerable number of able and honorable men, who 
can be trusted to hold and manage the money of others. 

Profits. — In most kinds of industry — in farming, for 
example — our labor produces more than its bare equiv- 
alent. There is a natural increase besides the cost of 
production. We call this surplus the profit. It arises 
from our putting into the enterprise something more than 
the mediocre average of our energy, brains, and skill. It 
is the encouragement which nature gives when man be- 
gins to work. Thus a farmer ought to be better off at 
the end of the year than he was at the beginning. There 
will be an increase of cattle and sheep and fowls. The 
amount of this increase will depend, not only upon his 
skill and intelligence, but also upon the capital which he 
has at his disposal. If he has money enough, he can 
employ extra labor to drain his boggy land; he c^n fer- 
tilize his fields; he can buy machinery, and harvest larger 
crops. Nature, by showers and sunshine and the fertile 
soil, will always add something to encourage his enter- 
prise; on the other hand, if he is lazy and dull, nature will 
prod him with various discomforts to urge him to labor 
and to learn. 

So in other kinds of industry. Besides barely enough 



44 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

to support life, the patient and skillful fisherman will 
bear home a profit which he can dispose of to enable him 
to add to his capital. If he already has capital enough to 
buy the best sails and fishing tackle, and intelligence to 
direct a number of men, he can increase the profits of 
his whole crew. 

The merchant, likewise, who contrives to bring sup- 
plies of goods to the points where men need them most — ■ 
from the farms where the owners have been known to 
burn the corn for fuel to the towns where, without the 
corn, people would starve — will get more than the bare 
cost of his business and his living. He will " make 
money " in helping others to make money. 

In short, the whole community, if intelligent and in- 
dustrious, will do better than merely to live; it will be 
enriched by the increase or profit which nature, cooper- 
ating with man, gives for labor wisely expended. This 
profit will be larger in proportion to the skill, education, 
patience, industry, and integrity of the people. It will 
tend to come to those who show these qualities, but will 
be reduced wherever the people are dull, dishonest, shift- 
less, or lazy. 

Rent and interest. — Suppose that a skillful young 
fisherman borrows a boat and tackle of a widow whose 
husband has been drowned, and goes fishing. When he 
returns, he shares his catch of fish with the men who went 
with him, and with the woman who owns the boat. This 
is her interest in the fishing, on account of her boat. This 
would be the simplest form of interest. It would be the 
same, in fact, if the fisherman, instead of paying a share 
of his catch in fish, engaged to pay her a fixed sum for the 
use of the boat. 



CAPITAL, CREDIT, AND INTEREST 45 

It would still be the same in case the fisherman, in- 
stead of hiring the boat, borrowed from the widow the 
value of the boat in money. The young fisherman could 
then buy a boat for himself, and pay her for the use of her 
money the same sum which he might have paid for the 
boat. 

Likewise, if the widow has a farm which her husband 
has cleared and drained, or which he has paid for out of 
his earnings, some one might like to borrow the farm, and 
pay her a share of his harvest. He might thus do better 
for himself than if he took up wild land. Or he might 
borrow in another way. The woman might have sold 
the farm outright for money; he could then borrow the 
money, and buy a farm, and pay her so much every year 
for the use of the money, instead of paying for the use 
of the land. 

By the use of the woman's capital, the fisherman or 
the farmer increases his product; without it he could 
not have made so much. He, therefore, in fairness, 
shares with the owner of the capital. This bargain 
is good for both parties in it. If one borrows a thing, 
a piece of property, or land, the share that he gives 
for its use is called the rent. But if he borrows money, 
the return upon it is called interest. We have seen that 
money is practically an order to pay for things or prop- 
erty. The borrower of money really borrows the things, 
whether boats, supplies, provisions, or materials, that he 
purchases with the money. The farmer who borrows 
money to improve his barn or buy stock really borrows to 
buy fertilizers or cattle. The money is merely a conven- 
ience in making the exchanges. When at the end of the 
year he realizes larger harvests on account of these im- 



46 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

provements, he owes a share as interest to the person 
whose labor or whose saving has enabled him to have the 
use of the money. 

So with the mill that has borrowed money to buy cot- 
ton to make into cloth. Part of the returns must go to 
the bank, that is, to the persons who, instead of spending 
their money, saved it and put it into a bank to be used as 
capital for new enterprises. Do not these bank deposi- 
tors deserve their share of the products of the mills, as well 
as the workmen who furnished the labor, or the superin- 
tendent who managed with the use of his brains to make 
the mill a success ? 

The rate of interest. — It might be agreed that the in- 
terest or rent should depend upon the amount of the 
product, whether more or less, of the fishing-boat or tlie 
farm. The lender should have a certain share, large or 
small, and the workman another share, and the manager 
who borrowed the capital still another. This is done in 
some cases. All then share in the risks and in the profits. 
Some years they would make good profits; again they 
might lose. 

But suppose the man who lends the boat or the money 
prefers to take a small fixed rent or interest rather than 
to share in the risks of the business, and sometimes fail 
to get anything. This is usually the case. A savings 
bank lends its money at, for instance, six dollars a year 
for every hundred. The borrower gives security, per- 
haps a mortgage upon his house, and takes all the risks. 
The bank then gets a regular return for its money to 
divide among the persons who have trusted their savings 
to its care. The borrower has all the profits, after paying 
his interest and other costs. 



CAPITAL, CREDIT, AND INTEREST 47 

How interest is fixed. — The amount of interest upon 
money, or the rent of capital, varies Hke all other prices. 
It depends upon the amount of money to be lent, whether 
it is plenty or scarce; upon the times, whether they are 
peaceful or stormy; upon the demand for money, whether 
few or many want to borrow; upon the security that can 
be given, whether there is much or Httle risk of repay- 
ment; upon the prosperity of the community where the 
money is used, whether the profits of business there are 
large or small. Thus the same money which will only 
bring three to five per cent when loaned to the Govern- 
ment might bring six per cent or more if loaned to a 
private person; or, sent to a new growing country like 
the State of Washington, it might get ten per cent or 
more. If the lender shares in the risk, he also shares 
justly in the larger profits. If he wishes perfect security, 
and the borrower takes all the chances, he must be con- 
tent with a small regular share. In the long run the 
people who take risks, expecting to "make money" 
without labor or trouble, make less than their neighbors 
who put their money into the savings banks. 

In general, and except in war, the rate of interest upon 
good security tends to diminish. This is because civih- 
zation produces such large capital and vast credit that 
reasonable enterprises can get what they need. 

If interest is low, other things are Hkely to be low; and 
no one has to pay so much for hiring his house or for the 
cost of Uving. But if the interest is high, every one who 
has a dollar in the savings bank or a single share in a 
corporation shares in the increase. This is because the 
community is linked together, so that whatever affects 
the whole affects each one. 



48 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

Usury. — Interest means the price paid for the use of 
capital ; but it once had a bad name — usury. For in old 
times, before the science of money was understood, many 
thought it wrong to exact interest upon money, though 
no one saw any harm in taking interest as rent for property 
or land or boats. Money was scarce, and many lenders 
were extortionate, and took cruel advantage of their 
debtors. Laws were therefore often passed, forbidding 
more than a certain rate of interest. To take higher 
interest than the law allowed was called usury. But 
these laws, like the laws which governments have passed 
to fix the prices of other things, did Httle good. In some 
States such laws may still remain, though they are con- 
stantly disregarded. 

The fact is, that all prices of money, land, labor, or 
products depend upon ''the law of supply and demand." 
Ten per cent may be as fair interest on the Pacific coast, 
where the demand is great, as five per cent is in New 
York. In New York, too, money may be better worth 
six or seven per cent in a good year of business than five 
per cent in a very dull year. Neither can any legislature 
compel a man to lend his money or his land unless a fair 
return is offered him. 

Foolish borrowing. — Wise borrowing proposes some 
increase of useful effort. Like honest labor, it produces 
for the community more than would otherwise be gained. 
But what if the man borrows for things thsit he cannot 
afford — an automobile for pleasure, or diamonds for his 
wife, or to speculate with? What if a man borrows, not 
to increase the efficiency of his work, but to spend for 
his living expenses? What if he borrows to relieve 
sickness or poverty? The truth is that most of us had 



CAPITAL, CREDIT, AND INTEREST 49 

better pay as we go, and lay by a little if possible, so as 
not to need to borrow and to be able on occasion to help 
a friend. 

Farmers' banks. — An interesting plan enables farmers 
to use capital upon their farms. The National Govern- 
ment provides for the estabhshment of banks in different 
sections of the country and lends its credit to start them. 
Investors of money are given the opportunity, safely 
guarded, to put their savings into these banks. The 
farmers give security for the amount of the loans and the 
money helps them to raise more produce than they 
otherwise could. The farmers of a neighborhood are 
associated together in procuring and using this money. 
They are given time in which to repay their loans and 
they pay a lower interest rate than if each farmer 
by himself had to find a money lender. This is what 
cooperation does to help people to help themselves. In 
many countries, for instance, in Denmark, there are 
immense systems of such cooperation. 



CHAPTER VII 
LABOR AND COMPETITION 

The law of life. — The general rule is that men must 
work for their living. The amount of work required may 
vary with men's wants, or with the cHmate in which they 
Hve. A native of Saon^ may get all the breadfruit and 
cocoanuts that he needs with little effort. But the 
higher the standard of civilization, the m^ore things men 
want; and the more labor therefore becomes necessary. 

The use of machinery, with the forces of steam and 
electricity, does not serve to change the general law. 
The more men use machines, the more their needs in- 
crease, so that the demand for labor still continues. 
Thus, when cloth could only be woven slowly by hand, 
men could have little cloth. But now that water power 
or steam can be made to weave cloth, every one wants so 
much more, that men and women still have to work for 
their clothing. 

The law that men must work for their living at first 
seems severe. Is it not, however, a kindly law? Thus 
on the playground, those who join in the play not only 
are stronger, but surely enjoy more than those who only 
look on and watch the others. The physicians tell us 
that this is the law of health. 

Labor and wages. — If any large group of people, the 
iron founders, for instance, stop working, the supply of 
iron for the Nation is cut down at once. Every one pres- 
ently suffers. On the contrary, the larger the number of 

so 



LABOR AND COMPETITION 5 1 

the workers is, the more regularly they work, the more 
they accomplish, and the fewer the drones in the 
hive, the greater is the product, and the more on 
the whole every one has; wages therefore tend to rise. 
It is the same with a nation as it is with a farmer's 
household. If all his children work they have produce 
to sell and grow prosperous. Why are wages higher in 
the United States than in Europe? It is because our 
product is greater. 

Labor and wealth. — Moreover, besides the increase of 
men's needs and wants, there is a constant increase in 
the number of the population, requiring new lands to be 
opened, new houses to be built, and new mills to saw 
lumber or weave cloth. If all the wealth of the richest 
nation were divided equally, it would last but a short 
time before men would have to go to work to make more 
wealth. The richest nation is only in the condition of a 
farmer who has on hand a rather better supply of tools, 
stock, and farm buildings than his neighbor. But be- 
cause he has this better supply, more care is required to 
keep it in order, and more labor is needed to use it. 
Thus, though the richer farmer lives better than his 
slovenly neighbor, he must still work equally hard or 
even harder, like the winning crew in a race. 

A common fallacy. — It is sometimes imagined that it 
would be better for those who work if their numbers could 
be restricted. They fancy that they could then have 
better pay. Or it is thought that the workmen would be 
better off if they worked fewer hours a day. There are 
exceptional cases where this seems true for a while. Our 
point here is that the fewer the laborers are and the less 
they work, the less must be the production of the Nation. 



52 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

If only half as many men make shoes, there will be fewer 
shoes for all. If ten milHon men work, and five milHon 
are idle, the latter will have to be fed by the others, with 
less food to go around. In short, the more intelligent 
and industrious the workmen are and the greater the 
number who are employed, the greater the product is 
which all at last share. 

The reduction of the hours of labor. — On the other 
hand, there is a limit beyond which men do not work 
efficiently. They will not work to advantage if wearied, 
oppressed, or discontented. Free men will do more 
work in eight hours, putting their good will or interest 
into their work, than in ten or twelve hours of slavish 
labor. Of course there are times, as in the harvest, when 
men must rush things and rest afterwards. 

The general duty of labor. — It follows that every one 
must contribute his share somehow toward the sum of 
the product of the Nation. For if anyone only eats and 
drinks and enjoys, but does not labor, he makes the Na- 
tion poorer. To work is not merely a necessity, it is 
an honorable obligation. That a man is rich gives him 
no right to consume or lessen the wealth of the Nation. 
On the contrary, his wealth, like the richer farmer's tools 
and stock, is an added reason why he should do a larger 
share for the good of all. 

Different kinds of laborers. — The word laborer prop- 
erly covers all kinds of service in behalf of the household 
or the community. In the larger sense not only the 
miner, the stevedore, the farmer, or the blacksmith, but 
also the clerk, the bookkeeper, the teacher, the super- 
intendent of the mill, the president of the bank, the 
trustees of property, are laborers or workmen. Socrates 



LABOR AND COMPETITION 53 

the philosopher, and Tennyson the poet, Macaulay the 
historian, and Darwin the naturahst, all have each added 
in his way to the resources of mankind. Even a child who 
shows an obHging temper makes the work of older people 
easier, like the oiler who keeps the machinery running. 

Disturbances in industry. — It is impossible to divide 
the labor of the Nation exactly, so that each shall do his 
fair share. Some are more willing or more capable than 
others. Some are quicker in finding their proper places. 
Some like to work and others do not. If any part of the 
body fails to take its share of the burden, strain comes 
upon the rest. Moreover, if the body is exposed to 
sudden change, the circulation is checked and one suffers 
a chill. So, in a great industrial society, any sudden 
change of conditions is hkely to cause disturbance. 
Thus there are frequent changes in the demands for 
labor. There may be a sudden need of wheat, or of boots 
and shoes, and many will start wheat-farms, or go into 
the shoe shops, till presently there is more wheat or there 
are more boots and shoes than are called for at once. 
Every invention or improvement, however beneficial in 
the long run, is apt for a time to cause disturbance and 
inconvenience. Thus, if the farmer buys a reaping- 
machine, he will not need to hire so many men, who 
may not at first find a new employment. The use of 
steam has multiplied the power of the world, but it has 
also caused disturbance to the old-fashioned industries 
worked by hand. 

The requirements of commerce also vary. A scarcity 
of food in Europe may force a demand on the American 
food supply, or the change of a foreign tariff may shut out 
our goods from the use of millions of people. 



54 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

There may be too many men trying to get a living in 
the cities, where expenses are greater than in the country. 
Or there may be more lawyers or architects than the 
Nation now needs, and the extra lawyers must find some- 
thing else to do. This irregularity in employment causes 
inconvenience and trouble and often serious suffering. 

Business crises. — It is said that '' there are tides in 
the affairs of men." So business and work have their 
high and low tides. This is partly because men have not 
yet learned to see far enough ahead to provide the exact 
amount of wheat, iron, and other materials that they 
need. There are not Hkely to be too many people to 
work, but there may be too many workers in certain in- 
dustries and too few in others. The law of supply and 
demand acts in such cases to cut down profits and wages, 
and to turn men from employments where they are less 
needed to those where they are more needed. Mean- 
while, during the process of change, work stops, men are 
thrown out of employment, less wealth is created, busi- 
ness becomes dull, merchants fail, the mills which are not 
well managed go into bankruptcy, and new enterprises 
are checked. Thus, whenever men work blindly in any 
direction, a period of reaction is likely to set in till the 
balance is readjusted; as when one uses certain muscles 
to exhaustion those muscles must be rested and other 
muscles brought into play. 

The free system. — Whenever men are free to get a 
living or to pursue wealth as each chooses, the usual 
result is competition. Competition really means free 
industry. Thus, one may choose his trade or profes- 
sion, or if he does not like it, he may change. He is free 
to work hard or not; he may make his own bargains and 



LABOR AND COMPETITION 55 

set his price upon the value of his labor or his products. 
He is free to acquire property to any extent, or to part 
with it. He is free to invest his money wherever he 
thinks that it will bring him the largest return, in the 
land or on the sea; or to hoard it, if he can afford to be so 
foolish. If anyone by working harder, or by his skill, 
or by intelligence, can make better wages than his neigh- 
bor, he is free to live better or he can Hve simply without 
working so hard. His neighbor is free to follow his ex- 
ample and to learn to excel him in turn. If one has 
genius, as Rothschild had, for handling and managing 
money, he is free to exercise this genius, as another is free 
to handle his tools. 

The law of free industry. — Anyone is free to work 
when and where he chooses and at such terms as he can 
make for himself, provided he does not interfere with 
other men's rights. He is not free to snatch what belongs 
to them, or, being stronger, to push them aside, or trip 
them up, or hinder their freedom. He must not interfere 
with them by force, nor oppress them by fraud, or by 
getting laws passed to the disadvantage of others; the 
rule of the playground that all the boys are free to play 
as they like, only so as not to interfere with each other, 
holds good for industry. 

The good side of freedom. — The freer men are to 
choose their work and to use and enjoy its results, the 
more work they are willing and happy to do. Their 
energy and enterprise are called out, their wits are 
sharpened, their hopes are stirred. At its best work 
becomes like play, an exercise of skill and power. If any- 
one wins unusual success, others are encouraged to try 
the better methods. If anyone enjoys his money, his 



S6 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

neighbors are urged to work harder, that they and their 
children may have the same enjoyment. Thus every 
one accomplishes more work in a condition of freedom, 
and the Nation is richer than if bad customs, like slavery 
and caste, or hard and fast rules fetter and restrict men 
and compel them to work. Do not children enjoy their 
sports better when left to themselves, than they do when 
the teacher meddles and makes rules for them ? 

Wherever men are really free to work, to earn, and to 
save or use their earnings as they please, the capable, the 
industrious, the temperate, and the intelhgent tend to 
rise to prosperity. A considerable and increasing class 
become '' capitalists " by the value of their houses or 
shops, or the amount of money in the bank. The skillful 
are always in demand, and generally at good wages. 

The moral side. — Moreover, when men labor, earn, 
and save or spend with freedom, they develop patience, 
self-reliance, self-sacrifice, venturesomeness, integrity, re- 
spect for others' rights, generosity. The slaves of the 
kindest master could not develop these qualities. If a 
committee or government of the wisest men could man- 
age and make rules for the rest, and provide for every 
one's necessities, men would not learn the sterling qual- 
ities of manhood so well as by being thrown upon their 
own resources. In fact, the strongest characters have 
been worked out through patient effort amid difficult 
circumstances. 

Certain evils of the free system. — If some are free 
to work hard and earn more, others must be free to 
work less and earn little; as, if boys race, some will come 
in behind. What if they become jealous and suspicious 
of the more successful ones, and, instead of trying again 



LABOR AND COMPETITION 57 

and doing better, grow discontented and sulky? But 
the worst trouble is that the energetic and fortunate 
people too frequently grow hard, proud, and selfish. 
Sometimes they are the beneficiaries of privileges and 
monopolies which they fear to lose. Even in a free 
land the laws do not secure complete freedom. No 
man is quite free as long as he is dependent upon another 
man, his employer, to secure work and a Kving for his 
family. 

The men at the bottom. — We have learned in ordi- 
nary times to feed and clothe the population. We do not 
mean to let anyone starve in the face of plenty. But 
the risk of occasional suffering still remains, especially 
among the unskillful and the newcomers who cannot 
speak our language. They cannot find emplo3anent as 
fast as they come to the country; they accept work for 
a meager pittance; the wages of others are kept down. 
This is because men are free to seek a Hving where they 
please, but not free enough to get away at once from 
where they are not needed to another place where their 
services would be in demand. If they were not free to 
come and go, fewer could crowd into the city. But if 
men choose to be free, they must sometimes bear the 
consequences of their freedom. Would any system 
work well if the people remained ignorant and careless ? 

Two kinds of competition. — There are two kinds of 
competition. One is that of brutes that struggle with 
each other. So there are brutal or thoughtless men, 
who try to get as much as they can for themselves by 
pushing and crowding the others. They seek, like robber 
barons, to make their living at the expense, or by the 
losS; or out of the labor, of others. We have plenty of 



58 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

laws to restrain oppression and fraud, but good laws are 
of no use unless the people are behind them. Better 
than laws is a new public opinion against men who 
seek to live by getting away the property of others. 
The boys and girls in our schools can help in making 
this new pubHc opinion. 

The competition of men : emulation. ^- The competi- 
tion of brutes is to get away what the others possess. 
The competition of men is to do more and better work; 
it is to economize material and power; it is to add to 
the sum of human wealth and enjoyment. In the com- 
petition of men every one in the end becomes better off; 
some excel, while the level is raised and the opportuni- 
ties of all are enlarged. The object of intelKgent men 
now is not to snatch the food from the table, but to 
heap the table with larger and more varied suppHes. 



CHAPTER VIII 
THE GRIEVANCES OF THE POOR 

Two extremes in society. — The condition of man- 
kind in barbarous times was that of constant peril from 
disease and famine. Men frequently did not know 
where their bread would come from. Our present civil- 
ization has not yet raised all men above the chronic 
dangers in which our forefathers lived. There are 
many, especially in the cities, whose meager wages 
ba:rely keep them from actual want. They cannot 
always get work. Frequently their wages are cut 
down, or they are thrown suddenly out of employment. 

There are thus two extremes in society — those who 
live in luxury and have more than they need or deserve, 
and others whose toil seems hopeless. Justice and 
humanity alike raise the question, how this unequal 
distribution of wealth can be kept from working cruelty. 

Social discontent. — In most industrial countries 
many people are bitterly discontented about these things. 
These are the socialists; they believe that something 
must be wrong in a community which allows a few to 
grow rich while many remain in abject want. 

The discontented are divided into various classes. 
Some of them have suffered so cruelly from bad govern- 
ment, as in Russia, that they favor revolution. Some, 
the anarchists, do not beHeve in governments with armies 
and poHce to enforce laws, but think that men would 
behave better if they were free of the control of the State. 

59 



6o RIGHTS AND DUTIES OF BUSINESS AND LABOR 

Some go to the opposite extreme, and believe that the 
government should own all the capital, and furnish every 
one with work and suppKes. Others think it a great 
abuse that individuals can own all the land and make 
others pay rent for it. They would have the land so 
held by the community that no one could have land 
which he did not use. Every one should then pay a 
fair rent to the government, that is, to all the people, 
to be expended for the benefit of all. Some people 
wish to fix the tax system (the single tax) so that every 
one can enjoy only as much land as he would actually 
use; for this use he should pay rent to the State. 

Many also claim that the government should own the 
railroads, the telegraph, the gas and water-works, and 
perhaps also the mines and factories, and other prop- 
erty, now worked by great companies. The govern- 
ment could then furnish employment to laborers with 
just wages and fair hours of work. 

In general, whoever wishes to add to the kinds of 
wealth which the people own together is so far a social- 
ist. In a free and civihzed country most men are partly 
socialists, inasmuch as they favor common schools, 
parks, public buildings, sewage, water- works, and the 
post office, and, in fact, a common government. 

The men and the system. — One cause of men's pov- 
erty and distress lies in the fact that the people who 
make up society are still very imperfect. The body 
cannot be sound and well unless the parts are sound. 

The inefficient. — There is everywhere a class of 
ne'er-do-well people, feeble in body or mind, and lacking 
in energy or skill. Their misfortune is not so much 
that they are poor, as that they lack health and 



THE GRIEVANCES OF THE POOR 6 1 

energy. If many of a people are inefficient, as in cer- 
tain tribes of savages, the whole community must be 
poor. 

The ignorant. — What if a large proportion of people 
are ignorant? The ignorant not only cannot earn or 
produce as much as the intelligent, but they also waste 
food, fuel, money, and Kfe itself in a thousand ways. 
If an ignorant people or a single ignorant household 
were given the best arrangements possible, they would 
not prosper. 

The idle. — How many idle or lazy people do we 
know, who do not care to study or read, or even to play, 
who prefer to watch others play, who do not desire to 
work? The more of these there are, the harder must 
others work. However excellent our social arrange- 
ments were, the idle people would drag upon us. Their 
needs now urge them to work at least part of the time. 
Should we use the arm of the law and compel them to 
work, or should we let them Hve on the community? 
Neither course would be good for them or make them 
happy. 

The unfortunate. — There are many who, without 
being imbecile or inefficient, are rendered helpless 
through sickness, accidents, losses, and the death of 
friends. Among these are widows and orphans who 
may be permanently unable to earn their living. All 
these lower the average of the prosperity of the commu- 
nity. Others must cheerfully work the harder in order 
to make good for their misfortunes. No mere change 
in the arrangement of property will remove this class. 
But we can largely reduce their number by preventing 
and removing the causes of accidents and diseases. 



62 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

The vicious. — Besides the cost of prisons and police, 
the labor of the community has to bear the constant 
burden of the vices which waste property, destroy health, 
and ruin character. Drunkenness alone has hitherto 
been the cause of a large proportion of the poverty. 

On the other hand, vice, and especially drunkenness 
and idleness, prevail wherever there is injustice or op- 
pression; no one behaves at his best unless he beheves 
in the fairness of his government, his employer, his 
teacher. 

A problem. — We who make up human society are 
more or less imperfect, more or less educated, more or 
less successful or happy. How can any social plan 
work well till we, the individuals, are better? How 
can a crew win a prize in the best of boats, unless the 
rowers are strong and skillful? Can we contrive any 
improvement by which all can possess and enjoy more? 

The objects of society. — One object is material, that 
is, an abundant supply of all sorts of products. Does 
anyone think we have a sufhcient supply now? Sup- 
pose we have enough now to give an average of three 
dollars a day for each person? How can we all have 
more? One way is to contrive to produce more, either 
by working harder, or by better management, or (what 
comes to the same thing) by good care not to waste 
our dollars when we get them. 

Justice. — We organize and make laws to secure as 
much justice as possible. Can we ever get perfect 
justice? Should we be content if we got it? Who 
knows that his father or his employer gives him his 
exact dues? Suppose a boy thinks his lesson worth 
more than the teacher marked him. Suppose a man 



THE GRIEVANCES OF THE POOR 63 

values his work too much, Can we ever make such 
men contented? Can society, that is, all of us together, 
do this better than teachers or parents do it? Some 
now have more and others less than they deserve. 
Should we prefer to share alike, without asking how 
much anyone did? Is any man, or any number of 
men, wise and good enough to award perfect justice ? 

Suppose now that every one who wants justice tries 
to do it; the parents try and the children try too; the 
teacher tries, and the pupils; the employers and the 
employed people try; in all our deahngs every one tries 
hard to do justice to every other. Who would not 
choose to do justice, and a Httle more, now and then, 
and possibly be wilKng to suffer an injustice once in a 
while, rather than to try so hard to get justice for our- 
selves as sometimes to do injustice to others? 

Freedom and manhood. — The greatest object to be 
gained by human society is manhood or character. 
Give us men and women who think for themselves, 
unafraid of what others say or do, with plenty of hearty 
good will and sympathy for each other. Find us some 
new system to increase our supplies if you can, but 
unless it will also make our people more energetic, 
capable, generous, and high-minded, we will not ac- 
cept it. 

Faith or trust in men. — Human society is bound 
together by confidence. We trust, on the whole, that 
our fellow-men will do right; they and we are more 
alike than we are different. We trust, if we show them 
what is wrong, that they will be fair and correct it for 
us, as we would do for them. If men cannot be trusted 
in the long run to do right, no laws or systems can be 



64 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

trusted. For men make and enforce the laws. But if 
men can be trusted, the fewer laws we make to com- 
pel them, the better they behave. Who of us likes to 
be forced to do right? Who of us is not pleased to be 
trusted? Society ought to be like the model school, 
where rules are least needed. 

Summary. — However much we desire to cure injustice, 
or to bring rehef to the poor, we must preserve freedom. 
We must get justice by doing it; we cannot cure 
one kind of injustice by doing another. If we knew 
that some one had more wealth than he deserved, would 
this make it right for us to appropriate his wealth? 

It is probable that the permanent common wealth 
will largely increase, at least in the form of school- 
houses, hospitals, museums, public grounds, and build- 
ings. No one can foresee sufficiently to be sure that 
various services, now performed by great corporations 
of individuals, may not sometime be advantageously 
performed by the whole body of the people. 

The fact is, when all are faithful and honest enough 
to be trusted to act fairly as individuals, all can then 
be trusted to act justly together. Neither can all act 
together, doing each other no injustice, unless the indi- 
viduals first learn to be just; as the boys of a club 
cannot play well together till its members are each 
willing to do their share of the work, free of jealousy, 
and happy to see each other succeed. 



CHAPTER IX 
THE ABUSES AND THE DUTIES OF WEALTH 

The significance of property. — Property gives its pos- 
sessor a lien more or less on the produce of the world. 
Besides the share which his work or skill buys, he is 
also entitled to an extra share representing his property. 
He may even do nothing, and yet draw from the world 
an income equal to the value of the labor of hundreds 
of men. It is as if the world carried a mortgage upon 
its shoulders. If one tliinks of the products of the 
world as put into a vast pile, a certain part of the pile 
must be given to the owners of property. On the other 
hand, is not the pile larger on account of the property 
which has been used as capital? The owners of prop- 
erty have furnished the necessary tools, machinery, and 
materials. The property-owners have often made the 
tools by their skill, or invented the machinery, or gath- 
ered the material by their frugahty. So far as this has 
been the case, no one grudges them their larger share 
in the products. Nor is anyone poorer because they 
have more. 

The rich. — A few rich men in a community often 
possess a disproportionate share of the property. This 
is true on a small scale in a fishing village or among 
farmers. It is partly on account of good fortune, by 
which one man out of a hundred finds the school of 
fish or the nugget of gold. It is partly the result of 
training and character, since few know how^ or care^ 

65 



66 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

to manage and keep their property. It is partly also 
because property, like a snowball, after it has been 
rolled up to a certain size, tends to grow bigger and 
bigger. 

Besides those who are rich through the ownership of 
property, such as houses and lands, there is a consid- 
erable class of people who are rich through the in- 
comes which genius, special ability, or skill enables 
them to draw. The voice of a great singer, the acumen 
of a great lawyer, the insight of a physician, or the 
rare administrative ability of a railroad superintendent 
brings the same sort of exceptional income as the pos- 
session of visible property, and gives its possessor 
" money power." Rare skill or genius, like good for- 
tune, is a natural inequality, making one man to differ 
from another. We find such differences in a school or 
family. They make life interesting. But we do not 
always love or value most those who possess exceptional 
ability. 

The rich who do no service. — The custom of man- 
kind has not only allowed men to enjoy the advantage 
of their fortune or exceptional abihty, but also to give 
their property to others, and especially to their children. 
Many are rich who have dorie no more service them- 
selves for the enrichment of mankind than if they had 
not been born. Sometimes the law has let children in- 
herit fortunes which the fathers had acquired by fraud. 
As long as we permit the good and deserving to grow 
rich, and to transmit their wealth to their children, the 
dishonest will sometimes do the same. 

Different uses of wealth. — Suppose one of the chil- 
dren in a family takes better care of his toys than the 



THE ABUSES AND THE DUTIES OF WEALTH 67 

others, or is ingenious and makes playthings for him- 
self, and so possesses more than the rest. The whole 
household has more resources than if he had less. So, 
if one can make the pile of the products of the world 
larger, every one else will be better off. Thus, if a 
milHonaire lays out his income in building houses, al- 
though he may grow richer by the rent, the city also will 
be richer, and every one may have better and cheaper 
shelter. So if he builds a mill, gives work to a thousand 
men, and makes flour or cloth. 

But suppose the rich man uses the power of his 
wealth to get away what others possess; suppose that 
he buys all the houses and charges higher rent; or sup- 
pose he and others with him own a railroad and refuse 
to take corn to market unless the farmer pays ruinous 
freight bills; or suppose rich men could buy all the 
water power and tax every one in the country for its 
use. Such conduct creates a monopoly. 

Monopolies, good and bad. — It is a monopoly when 
one or a few hold and control the use of any valuable 
thing. But a monopoly is not always bad or unfair. 
Jenny Lind's voice was a sort of natural monopoly. It 
gave her the opportunity to become rich. The laws 
confer a monopoly upon an inventor or author. No 
one can use the invention or publish the book without 
paying the man who holds the patent or copyright. 
The laws even give the inventor the right to charge 
more than is fair, if he chooses to be so foolish. Many 
monopoHes are plainly oppressive. If Robinson Crusoe 
had secured the only spring of water upon his island, 
and had refused to let new colonists have water without 
working for him, this would have been cruelty. So it 



68 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

is when men buy up some article of universal necessity, 
like rice, coffee, or quinine, in order to get their own 
price out of others' pockets; or, again, when they get 
laws passed which compel us to use the product of 
their mines or their mills rather than goods made else- 
where. 

The limit of monopolies. — The great moral laws 
which govern the world limit monopolies. If the mo- 
nopoly is abused, it checks or kills itself. The great 
singer may ask too large a price; the author or the in- 
ventor may charge so much as to stop his sales. The 
railroad will not make so much money by high rates as 
by carrying more goods at fair rates; or, if its rates are 
exorbitant, another road may be built. The salt or 
the sugar must not cost too much, or people will send 
abroad to get their supplies. This holds true if the mo- 
nopoly is not protected by force or by law. But if the 
laws make the monopoly, giving advantages to one or 
to the few, or to a class of nobles or rich men, the rem- 
edy lies in making the laws equal for all. 

Land monopoly. — We have already said that land 
is like no other property; no man created it as men 
create houses and ships. Moreover, there is a Hmit 
to the land in a country, but there is no limit to the 
things that men create. Does it not seem as if the 
laws governing the holding of land ought to be quite 
different from the laws that control other property? 

The holding of land is now especially subject to abuse. 
For instance, it sometimes happens in a city that one 
man or a few, owning land needed for building houses,, 
hold it so as to keep it out of the market and arrest the 
growth of the city, or they ask an unreasonable price. 



THE ABUSES AND THE DUTIES OF WEALTH 69 

This makes a monopoly. The idle owners may finally 
lease their land for other men to use, and so draw a 
large income for themselves from the prosperity of the 
city. 

So when men get control of great tracts of fertile land, 
or of timber, or of mines: the time comes when these 
men have a monopoly, and can demand their own price 
for the land. This price has to come out of other 
men's pockets. For the men who hold the land mo- 
nopoly do not add to the wealth of the world, or confer 
any benefit by holding their property out of the market. 

The cure of land monopolies. — The laws may be 
made either to encourage monopoKsts of land or to dis- 
courage them. It rests largely with the assessors of 
taxes to see that the men who hold more land than 
they use, hoping to make money by keeping it, shall 
pay as much into the treasury as if the land were sold 
to put buildings upon it or to cultivate it. 

The rivalry of the rich. — Kings used to be foolish 
enough to fight with each other to extend their domain; 
so rich men sometimes ruin each other's property in the 
hope of winning more at others' loss. Fortunes some- 
times change hands on Wall Street as at a gambling- 
table. Men contrive to injure the trade or the business 
of their rivals, to make it unprofitable to run their 
mills, and to drive them into bankruptcy. This sort 
of struggle does not make the pile of the product of 
the world larger, but lessens the general wealth and 
produces hardship as in time of war. 

Waste by the rich. — A great fortune may be like a 
reservoir in which the water is stored to irrigate the 
fields. But suppose the man uses his income for his 



yo RIGHTS AND DUTIES OF BUSINESS AND LABOR 

own indulgence, for his whims and fancies, like the 
famous mad king of Bavaria. Suppose he spends it in 
costly banquets, or locks it up in private pleasure- 
grounds. Even so he cannot spend without giving some 
of his money back, through the goods he pays for and 
the men whom he hires. Nevertheless, his waste and 
extravagance become a pubHc loss. For while the in- 
vestments of income in new buildings or railroads 
cheapen prices and rents, the expense for extra service 
and luxuries makes prices higher. The evils of gigantic 
wealth might be such that the community "would be 
forced to erect some limit or safeguard against the abuse 
of money — as we have to do when a man wastes his 
earnings and starves his children. 

Capitalists. — The poor man begins to be rich as soon 
as he has acquired any kind of property, as tools or 
land, or more than he needs to use at once for himself. 
He then becomes a capitaHst. He may be an owner of 
shares in the great railroad for which he works. The 
bank or railroad in which he is an owner may possess 
more property than any man in the State. Like the 
rich man's fortune, so the company composed of many 
little capitalists is a reservoir for accumulating and 
using money. It has also some of the same dangers of 
wasting its resources, or of using its power to fight with 
others, or of making monopolies, or even of controlling 
legislation. It is not, therefore, the rich who are to be 
feared so much as wasteful, reckless, or unscrupulous 
men, whether they have much or little. 

The duties of wealth. — The possession of wealth is 
not merely a legal right which certain ones enjoy, or a 
luxury of which a few accidentally may have more than 



THE ABUSES AND THE DUTIES OF WEALTH 7 1 

their share. Wealth imposes certain duties upon its 
possessor. 

Trusteeship. — There are in the United States thou- 
sands of milHonaires, holding the titles to a large pro- 
portion of the land, banks, railroads, mines, and factories. 
Their actual or personal services to the community 
cannot generally have been worth as much money as 
they possess. They may, therefore, justly be consid- 
ered as so many trustees, having for the time the care 
and management of the accumulation of the wealth of 
the whole community. This great fund, as we have 
seen, is partly the product of human labor and thought, 
and partly the bounty of nature. It is morally sacred 
for purposes of good. The fact that this obligation is 
not legal, but moral, makes it more honorable. The idea 
of trusteeship does not apply merely to millionaires. 
Every person is responsible for what he uses or spends. 

So far as rich men acknowledge and act under this 
obhgation of trusteeship, there may be little pubhc 
injury in their acquiring and holding as much wealth as 
they please. Moreover, if anyone is a foolish or in- 
capable trustee, the rule is that his wealth goes out of 
his hands, as power disappears from one who does not 
know how to use it. 

Service. — Does the possession of property ever give 
anyone a right to lead a useless or idle hfe? On the 
contrary, the more one inherits or accumulates, the 
more he is bound to the universal duty of some kind of 
service in making the world better, richer, or happier. 
The more wealth one possesses, the meaner he is, like a 
selfish older brother in the household, if he does no good 
with his money, or if he becomes only a bigger drone 



72 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

in the hive. Does anyone imagine that happiness is 
gained by being mean and grasping? 

Sharing. — The trusteeship of property makes it 
shameful for any inteUigent person to lavish luxuries 
upon himself. Shameful, too, is unnecessary exclusive- 
ness, especially with regard to grounds, paintings, and 
works of art. What can we think of a man who fences 
off from the pubKc a great forest, or appropriates for 
himself alone a tract of the seashore? How can a man 
forget the principles of honor and kindliness which hold 
in every home and schoolroom ? We let a child own his 
knife or football and make him responsible for it, but 
we expect him willingly to share its use with the others 
and not to lock it up for his own pleasure. We do not 
need laws for this purpose; our public opinion makes 
the law. 

Public munificence. — It was the custom of the Athe- 
nians to expect their richer men to undertake certain 
special kinds of public expense, as the fitting out of a 
trireme, or the cost of a festival. So in our times we 
expect no rich man to live and die without public bene- 
factions. It is not merely generosity to give; it is the 
return of a debt. Much of the accumulated wealth of 
the world has arisen from the toil and effort of the men 
of the past, from whom we all inherit property, ideas, 
and inventions. Are we not bound to keep good what 
we have inherited, in special provision for the future — 
for public works and buildings, for schools and colleges, 
for art and music? The more property one has, the 
larger is his debt to the past for the sake of the future. 
Should we not be ashamed if our generation left the 
world poorer than it had been before we were born? 



THE ABUSES AND THE DUTIES OF WEALTH 73 

The ideal city. — What kind of town would you Kke 
best to live in ? Not one where every one has precisely 
the same income as every one else; this would not be 
just. Not where the State holds everything and each 
individual must obey the rules of a great Central Bureau 
at the capital. Will not the largest prosperity come 
where the laws give free scope to the skill and energy of 
the people in the creation of wealth; where no hurdles 
are put in the way of those who are willing to work; 
where least money is wasted and squandered; where 
every one is respected for his worth as a man; where 
citizens are accustomed to work happily together; where 
the wealth which all help to earn flows naturally to 
those who show most industry, good sense, integrity, 
and capacity in making and using it? In such condi- 
tions, the wiser and more able people, being also friendly 
and considerate, no one could fall into grievous poverty, 
and no man could use his wealth for oppression. Thus, 
the free system of acquiring and holding wealth works 
out justice and happiness, as fast as individuals learn 
the democratic idea — to respect one another and to 
do to others as they wish others to do to them. But 
unless there are plenty of such fair-minded and demo- 
cratic citizens, there can be no happiness or prosperity 
enforced by rules, whether made by a sovereign, Kke the 
German Emperor, or by the majority of a republic. 



CHAPTER X 

BUYERS AND SELLERS; OR, THE MUTUAL 
BENEFIT 

There are two theories of the conduct of business. 
One theory is that each party in trade aims to get an 
advantage over his neighbor: one should try to get as 
much and give as httle as possible. If goods are de- 
fective, the seller should conceal the fact. The only 
rights which this theory of business recognizes are legal 
rights. One must not overreach far enough to come 
within the penalties of the law. Otherwise, so far as 
the law does not prescribe, the other party to a bargain 
must look out for himself. 

The notion underlying this theory of business is that 
whatever one makes, the other loses. As in gambhng, 
the gain of the winner means that others must lose, so in 
business it is sometimes supposed that the successful 
merchant grows rich at the expense of his neighbors. 
Business is thus only a game in which every one is try- 
ing to win other people's money. The laws are the 
rules of the game. 

The idea of business. — The fact is that buyers and 
sellers perform a mutual service not only to each other, 
but for the benefit of the pubhc. Mercantile business 
is not a game, but an industry, like farming or manu- 
facturing. The merchant increases the value of goods 
by bringing them to market. He therefore deserves 
wages or salary for the service which he renders in col- 

74 



BUYERS AND SELLERS; OR, THE MUTUAL BENEFIT 75 

lecting and distributing his goods. He receives his 
wages in the form of the surplus of his sales over their 
cost. The larger his sales and the greater his skill, — • 
that is, the more valuable his services, — the greater 
his income deserves to be. The law of supply and 
demand regulates this. The income of merchants is 
not, however, uniform. Sometimes it is less than the 
equivalent of the work and cost which they have spent, 
and sometimes it is much more. It involves risk and 
forethought and attention to numerous details. In the 
long run, the merchant's income is nearly the same as 
equal labor, skill, and experience would produce in any 
other industry. 

It follows that what the merchant honestly makes is 
not at anyone's expense or loss. The wheat gathered in 
the warehouses is actually worth more than when in the 
farmers' granaries. Neither the farmer, therefore, nor 
anyone else has lost by the merchant's fair profit in the 
purchase and sale of the wheat. So with other prod- 
ucts. 

The rights of buyers and sellers. — The earliest kind 
of trade was barter. In barter each party was both 
buyer and seller. In fair barter each shared the advan- 
tage of the exchange; for example, a pack of skins was 
exchanged for a sack of wheat. So in modern trade, 
which is only a more complicated kind of barter. In a 
fair sale the buyer and seller divide the value of a mutual 
advantage between them; each, therefore, ought to be 
better off than before. If a dealer, as a rule, got for 
himself the whole advantage of his bargains, it would 
be the same as getting what did not belong to him. 
In fact, business could not go on in this way. In the 



76 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

long run the advantage must be mutual in men's bar- 
gains. 

It follows that overreaching, even though the laws 
do not specify it, is an attempt to get what belongs to 
another. The sale of goods which are defective or 
below the standard — the adulteration of food or the 
watering of milk — is not trade, but an attempt to get 
what belongs to others. So, too, if purchasers seek to 
beat prices down to less than the cost of goods, they 
try to get what belongs to others, and they tempt men 
to cheat them. 

Is honesty the best policy? — It is not only just that 
buyers and sellers shall share in the mutual advantage 
of their bargains, it is also for their interest. This is 
the meaning of the proverb, ^^ Honesty is the best 
policy.'^ Business is best when every class gets full pay 
for its services. If the farmers do not get their share of 
the proceeds of their labor, they will have less money to 
spend and in the end the merchants will feel the loss in 
the slackening of their business. Men who have been 
cheated in a trade cannot so well afford to trade again; 
on the other hand, men appreciate just treatment and 
tend to treat the other man likewise. In a community 
where men aim to share generously, values increase and 
there is more wealth to share. Better yet, it is a pleas- 
ure to be sure that the other man with whom we deal 
is satisfied. 

Legitimate business. — It follows that only those 
kinds of business are righteous which result in benefit to 
the public. Who wants to engage in a business which 
does no good, or which results in harm and loss to the 
community ? 



BUYERS AND SELLERS, OR, THE MUTUAL BENEFIT 77 

The law of supply and demand, or competition in 
buying and selling. — We can imagine all the cattle of 
the country to be in the hands of a few families, who 
have cattle and nothing else. They must therefore have 
wheat and other supphes from the farmers. They be- 
gin by exchanging with the nearest farmer at his own 
price, which gives him a large profit. A second farmer 
presently appears and offers his wheat for less; and the 
first farmer, rather than not sell, reduces his price. 
Thus, after a time, by competition, the farmers fix a 
price as low as they can afford. Thereafter the ex- 
change of cattle and wheat regulates itself according to 
the plenty or scarcity of the one product and the other. 
If the cattle men have a good year, they can afford to 
furnish cattle at a lower price; if wheat is scarce, it 
must be dearer. 

In some such way as this the prices of all sorts of 
things are fixed. The more valuable or the rarer a 
thing is — in other words, the more work it costs to 
obtain it — the higher its price. A great demand for 
any article sets many fresh hands at work to supply it, 
and it presently becomes plentiful; or, if the demand 
faUs, the price is lowered accordingly. Thus, iron was 
once scarce and costly, till men learned to produce it on 
a great scale; then, all sorts of ironware became cheap. 
There was once immense profit in trading with China 
and India; there were also great risks. Now the mer- 
chants make so small profits in tea and indigo that it 
hardly pays any better to build ships for the Eastern 
trade than to build houses at home. 

Selling in '* the dearest market.'' — Suppose that a 
farmer raises fruit and vegetables, which few of his 



78 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

country neighbors care to buy. A few miles away, in the 
town, many people need his products. Their demand, 
being active, allows the farmer a good price. This is 
because he brings his fruits where they are most wanted. 
If he sends his goods to a great city, and furnishes 
superior fruit to persons who demand the best, he will 
receive still better prices. The " dearest market " is 
wherever the demand or need is greatest. Whoever takes 
the pains to meet such a demand will be well paid. 
The dearest market also is usually, though not always, 
where people can afford to pay a higher price. Thus, the 
dearest market for the farmer and fisherman is in the 
city, where most of the money is. It is of mutual ad- 
vantage to buyer and seller when goods are brought to 
the dearest markets. By and by competition will bring 
the prices down so that every one can have enough at 
reasonable cost. 

Buying in the cheapest market. — The cheapest market 
is where the supply is most abundant. The cheapest 
market for fish is on the shore where fishing-boats come 
in. Here is the place to buy to best advantage. The 
place to buy clothing most cheaply is in the great shop 
where clothing is piled on the shelves. Whoever will 
buy where goods are abundant and therefore cheap, ac- 
commodates the seller, who wants money for his goods. 
Thus, every one gains when purchasers buy in the 
cheapest market. If, however, too many purchasers 
crowd into the cheap market so that the goods become 
scarce, it is fair to all to raise the prices. In this case 
those buy the goods who need them or care most for 
them; but those who can get along without them do 
not buy, or they purchase something else, or they seek 



BUYERS AND SELLERS; OR, THE MUTUAL BENEFIT 79 

a cheaper, that is, more plentiful, market. Meanwhile, 
as soon as prices rise, men set to work to provide a 
cheaper market again; in other words, to furnish a 
fresh and larger supply. 

Freedom in trade. — In barbarous times it was so 
perilous and costly to travel, and roads were so bad, 
and transportation of goods was so risky on account of 
pirates and shipwrecks, that men often starved within 
a few miles of a cheap market. For many centuries 
troublesome tolls were collected of merchants, and cus- 
tomhouses stood on the border of every httle State, so 
that men could not afford to bring their supplies to the 
markets. For want of free trade there was poverty 
and suffering, as when tight cords restrict the flow of 
blood to the limbs. 

Civilization cuts the cords and gives the body freedom 
to act. It makes free turnpikes and bridges; it unites 
little states into nations and removes the barriers be- 
tween them; it builds great lines of railway. In the 
United States there is perfect freedom of trade among 
the States and Territories. When, therefore, the crops 
fail in one section, supplies flow freely in from other 
quarters to meet the demand. Famine, the scourge of 
ancient times, is rendered almost impossible, except in 
time of prolonged war. The farmer in Dakota, with his 
great wheatfields, is brought close to the needy markets 
of New England. This is because every one in the 
Nation is free to buy in the cheapest market and to sell 
in the dearest. 

Freedom in trrde ; what harm it may do. — While 
freedom in trade works well on the whole, it some- 
times does harm^ Just as laws which work well for the 



8o RIGHTS AND DUTIES OF BUSINESS AND LABOR 

many may seem to do injustice to individuals. Thus, it 
is good for the Nation that we can buy corn in the cheap- 
est market, which is in the West ; but this at first was 
hard for the Eastern farmer, who could not raise corn so 
cheaply. It is good, on the whole, that the Vermont 
farmer can sell his eggs and chickens in the dearest mar- 
ket, which is Boston or New York, but this makes eggs 
and chickens dearer for the people in Vermont. We know 
that when there is demand in the brain for nourishing 
blood, it is drawn away for a time from the extremities. 

The two sides. — Competition in trade may be selfish 
and cruel, if a neighbor outbids another or undersells 
him, on purpose to get rid of him and to control his 
business; or if a great firm seeks to crush its rivals. 
When there is a great snow blockade, cutting off a city 
from its supphes, it is selfish and cruel if the milkmen 
exact extortionate prices because of the needs of suffer- 
ing children. 

But competition or freedom of trade need not be sel- 
fish. A class of boys may aim each to get the most 
perfect mark of excellence; so every man who sells, if 
he be honorable and high-minded, may aim at furnish- 
ing the best quality of articles on the most favorable 
terms which he can afford; so purchasers may, and 
sometimes do, scorn to exact unreasonable advantage 
from the necessities of the seller. There is no need, 
because a man carries on business, to forget that he 
deals with men like himself. If the laws allow mean- 
ness and extortion, enlightened public opinion, not to 
speak of religion, calls the louder for humanity and 
friendliness, and brands as shameful the competition 
which forgets the man in the bargain. 



BUYERS AND SELLERS; OR, THE MUTUAL BENEFIT 8 1 

Paying one's debts. — Men are debtors and creditors 
in turn, according as they owe money to others or others 
owe them. If, now, a man's debtors put off payment or 
do not pay at all, there will be difficulty in his paying 
his creditors as he has promised, and again, in their 
paying others. As the failure of any link in the chain 
weakens the whole, so whenever a promise is broken there 
will be suffering and loss. If many do not pay, money 
will be hard to obtain, and business in general will suffer; 
whereas prompt payment by one gives the means of pay- 
ment along a whole line of men. The money which be- 
fore failed to circulate, moves on freely and makes more 
business, as well as the means of happiness, every time 
it is promptly paid. 

Bankruptcy. — It often happens that merchants and 
others fail to pay their obligations. No one then will 
trust them longer, and they may have to stop their 
business. This is a hardship not only to them, but also 
to others who depend upon them — their employees, as 
well as those who have been giving them credit. The 
greatest suffering often falls on those who are turned 
out of employment. 

Bankruptcy sometimes happens through the failure of 
others; but most often it comes about through the ex- 
travagance, the folly, the unskillfulness, and even the 
fraud of those who have charge of the business. 

Bankruptcy laws. — When men fail to pay their debts, 
there are often many creditors, all of whom ought fairly 
to share in the assets or property of the debtor, so far 
as he has anything left. It may be that the debtor, if 
the creditors will agree to give him time to settle his 
affairs, will contrive to pay them more than if they 



82 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

seized and divided his property at once. It may be 
fair, too, if the debtor honestly gives up all that he has, 
for his creditors to release him from further payment 
and leave him free to go on in business, provided he 
can find merchants to trust him again. Bankruptcy 
laws provide through the proper courts for the protec- 
tion of the interests of both debtors and creditors. 
Whereas once a debtor could be cruelly imprisoned by 
a hard-hearted creditor, the debtor is now given a fair 
opportunity to make up his losses. 

Sometimes creditors live in different States. The 
Constitution of the United States gives to Congress the 
power to make bankruptcy laws for the Nation and so 
to treat creditors in a distant State as fairly as if they 
lived where the failure took place. 

As men abuse other laws, so the dishonorable some- 
times use the bankruptcy laws to wrong their creditors 
and to secure a release for themselves without giving 
up their property. On the other hand, men of honor 
sometimes do more than the law requires, and after 
being released from their creditors, insist, as soon as 
they are able, upon pa3dng the full amount of their 
debts. If every one carried on business in this way 
there would be few failures. 



CHAPTER XI 

EMPLOYERS AND THE EMPLOYED: THEIR 
INTEREST IN EACH OTHER 

All men are either employers of labor or employees. 
Most men are at the same time both employers and 
laborers. 

The rights of employers ; fidelity. — Fidelity is to do 
another's work, or the public work, as well as possible, 
or as well as if it were one's own. The truth is, that the 
workman sells something, namely, his work, whether of 
his hands or his brain; and, like everything else sold, 
he wishes it to be of standard quality. Is the duty of 
faithful service lessened if the employer pays insufhcient 
wages or salary? No. An honest man can never do 
less than honest work; nor is the service merely for 
the employer; the whole community is poorer for every 
wasted hour or blundering piece of work. Worse yet, 
the man who performs unfaithful service has become 
degraded and demoralized. Fidelity includes honesty, 
sobriety, and punctuahty. Courtesy and kindly man- 
ners are also due to the employer, as they are due to 
every one. How can we keep friendly relations with 
others if we are rude and uncivil? 

The rights of employees ; wages or salary. — Who- 
ever sells his work or skill is entitled to its fair price no 
less than if it were corn or cloth. Fair pay is not only 
a righteous amount, but it includes punctuality in pay- 
ment. Fair pay means reasonable and humane hours 
of work and vacation or holiday time. We are learning 

83 



84 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

that the rule of humanity is the rule of effectiveness. 
Every one can do more and better work if he is treated 
kindly. 

Respect. — The employer has not discharged his duty 
in paying a man; he owes him also courtesy and friendly 
respect. How can he forget that the other is a man 
like himself? 

Honest management. — Employees are not only en- 
titled to fair wages; in a certain sense they are partners 
with the employers. If the management must keep 
clear of speculative hazards which risk the capital of 
the stockholders, so it must not imperil the employ- 
ment of its workmen. Loyal employees are the greatest 
asset of an enterprise. The management needs to keep 
them together, and to find work for them in dull times. 

The labor market. — In one view, labor, like every- 
thing valuable, is subject to the law of supply and 
demand. The men who have their labor to sell will 
bring it to the dearest market, that is, wherever labor 
is most needed. It will there get the best pay. On the 
other hand, those who wish to hire labor will go to the 
cheapest market ; that is, where labor is plentiful. Thus, 
if a company wish to build a factory, they will consider 
where they can get workmen to the best advantage. 
They could not build their factory in Alaska so well as 
in Ohio, because the latter State is a better market for 
labor. Meanwhile, wherever they build their factory, 
workmen will flock there. It is of advantage to both 
employers and the employed to buy labor in the cheap- 
est market and to sell it in the dearest. On the whole, 
work is thus distributed where it is most needed and 
where the best pay can be given it. If any considerable 



EMPLOYERS AND THE EMPLOYED 85 

number of workmen are getting small wages, an oppor- 
tunity is afforded to get better wages wherever a larger 
demand is made for their help. Employment offices are 
now often provided by the State to help place men where 
they are most needed. 

A difficulty : the human element. — Labor is not 
simply valuable as a commodity. It is human also. 
When corn is plenty, or inferior in quality, it is no great 
hardship if it brings a low price, or does not sell at all. 
But the workman must Kve; he may have a family de- 
pendent upon him; even if he is an inferior workman, he 
must still be housed and fed as a man. Moreover, the 
laborer cannot easily be transported, like corn or commod- 
ities, wherever the demand and the pay are greater. 
Many circumstances may render it costly or impossible for 
him to move to a place where his labor will be in demand. 

Low wages ; the limit of decency. — While at times 
the number of workmen may be far greater than the 
demand, there is a limit below which it is not the custom 
to let wages fall. This limit is fixed by men's consid- 
eration of humanity.. The more high-minded employ- 
ers are, and the stronger public opinion is, the higher is 
this limit of wages to which a man's work entitles him, 
on the ground that he is a man. The labor unions have 
helped immensely to establish a public opinion which 
works toward better standards of Hving for all workers. 
Certain excellent laws protect them from overwork, for- 
bid factory work for children, and seek to prevent em- 
ployers from hiring people below a decent or sufficient 
wage. This is often called the minimum wage, and it 
means just enough to support the worker in health. Of 
course, this varies constantly. 



86 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

Employees who cannot help themselves. — In years 
of good harvests and prosperity there is more money 
than usual to spend, and there is more employment in 
all industries for men able and willing to work. But bad 
years come when there is less to divide and to spend, 
and therefore less work is called for. The inferior or 
unskilled workmen are the first to suffer for want of 
employment. Moreover, the conditions of civihzed Hfe 
require costly tools and machinery: no civilized man 
can easily work alone, as the savage can; he needs the 
cooperation of others. A man cannot even till the 
soil without assistance or capital. The law of supply 
and demand works after a while to correct disorders 
of industry, and to set men again to work where 
they will be needed, but this law has to be supplemented 
by constant sympathy and humanity to prevent the 
helpless from suffering. For the whole body of the 
community is bound up with the welfare and prosperity, 
or the loss and misery, of any portion. If individuals, 
then, cannot provide employment for their neighbors 
who wish to find work, it may be the duty of the State 
or the city to provide public works, such as the conserva- 
tion of forests and lands, the building of streets, and other 
improvements. We may hope that better education will 
also train a larger proportion of the children to such skill 
and faithfulness as will give them permanent employment 
at all times. 

Employers who cannot help themselves. — We have 
seen that the number of workmen may sometimes be 
greater than can be employed; or business may be dull 
and unremunerative; or certain factories may have 
greater expenses in rent and interest than others, and 



EMPLOYERS AND THE EMPLOYED 87 

SO cannot afford to pay sufficient wages to go on making 
their goods. Unless the employers are successful and 
can accumulate some capital, and keep their plant in 
good repair, they cannot weather the storms which 
sometimes threaten the financial and industrial world. 
The poorly managed shops and factories are often 
obHged to stop. This is not because employers are 
unwilKng to keep their workmen, but because they have 
no money to pay them. 

Industrial warfare ; strikes and lockouts. — It some- 
times happens that employers and employees disagree 
and quarrel. This may be on account of some fooHsh 
misunderstanding, or the bad and arrogant temper of 
one man. In some cases the men, who perhaps belong 
to a union, vote to quit work until their demands for 
better hours or an increase in wages are granted. This 
is called a strike. Like war, it means loss of time and 
money on both sides, and often great suffering to the 
workmen's families. It ought to be justified only by 
urgent necessity. It might, Hke war, almost always be 
prevented. 

The employers may make war upon their workmen by 
shutting down their works and stopping wages till the 
men accede to their wishes. This is called a lockout. 
It results not only in hardships at the time, but, as in 
war, in the loss of good feeling afterwards. 

Trade unions. — The world was never so full as it 
is now of all kinds of societies, associations, and clubs 
in which men and women cooperate for mutual enjoy- 
ment or the protection of their interests. Among the 
most important and powerful of these societies are the 
trade or labor unions. Thus, the printers, the teleg- 



88 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

raphers, and other skilled men form unions among them- 
selves, and later various groups of trades join in a 
greater Federation of Labor. Meanwhile, groups of 
employers also form associations for their common in- 
terest. At last in many industries the fixing of prices, 
hours of work, and other conditions comes to be a process 
of bargaining between the representatives of the unions 
on the one side and of the employers on the other. 
The individual workman who might seek in vain by 
himself to secure fair treatment from a big corporation, 
now has the support of a great organization with expe- 
rienced officers at their service and with money in their 
treasury. The trade unions are also friendly and benefit 
societies, pledged to help their members in times of sick- 
ness and unemployment. 

The open and the closed shop. — Not all the men in 
a trade choose to belong to a union. There are various 
reasons why some prefer to remain outside. The rules 
for entrance sometimes prove to be a barrier against new 
men. For the men in a union are reluctant to admit 
members for whom they cannot see plenty of regular 
employment. In some cases they hold a certain monop- 
oly of skill, and, like most monopolists, they do not like 
to be disturbed. There are also men who prefer to 
be free of the rather military discipline of the unions. 
Suppose the majority order a strike to which the minority 
object as unfair. Ought a faithful member of a union 
ever to act against his union? Some men doubtless 
think that they ought. But there are always men and 
women outside of any union. Some of them are poor 
or shiftless workmen. The non-unionists have to find 
places in ''open shops," that is, where employers run 



EMPLOYERS AND THE EMPLOYED 89 

their business as they choose and prefer to have non- 
union help. They may pay less or even more than 
union wages. But they do not bargain with the unions. 
At the same time they may cheerfully employ members 
of unions, without asking the question whether a man 
belongs to the union or not. 

On the other hand, the unions desire, whenever they 
become strong enough, to control the "help" of a mill 
or a mine, so as to have no workers in it except members 
of the unions. This makes the ''closed shop." A non- 
union man cannot get work in it, unless he enters one 
of the unions. Sometimes the unions go so far as to 
forbid their men handling goods which have been manu- 
factured in an open shop. The unions have sometimes 
imitated the unfriendly and autocratic methods which 
employers have too often used in deahng with their 
workmen or other employers. All such actions on one 
side or the other are like war. They lead to reprisals, 
retahation, and violence, and they leave an ugly temper 
which spoils honest work and splits people of the same 
nation into hostile camps. 

Arbitration. — When men differ, or even when they 
suffer injustice, there is a more sensible method than to 
fight. This better method is called arbitration. In arbi- 
tration both parties agree to submit their case to an 
impartial committee, or board, and to abide by its deci- 
sion. In some cases each party chooses one member of 
the committee, and the two choose a third. Sometimes, 
as in Massachusetts, the State keeps a standing Board 
of Arbitration. In New Zealand the law provides the 
means of arbitration and requires employers and em- 
ployees to settle their differences peaceably, without 



go RIGHTS AND DUTIES OF BUSINESS AND LABOR 

compelling all the people in their town to suffer in their 
quarrel. As employers and their employees become 
more intelKgent and humane, arbitration in some form 
may be expected to prevent the waste and ill-feeling 
always occasioned by strikes and lockouts. Quarreling 
is stupid business. 

The interests of employers and the employed together. 
— Of course, employers need nothing so much as thor- 
ough workmen. Even though they must be paid high 
wages, good workmen are the most economical, just as 
goods of standard quality are cheaper in the end than 
inferior goods. The employer with skilled and willing 
men may easily afford to pay the best wages and yet 
produce goods which will sell at a profit. 

The success of the employer is generally to the in- 
terest of the workmen. His success means permanence 
in work, whereas the less successful shop will often have 
to be closed. His success means the abiHty to pay 
better wages, and to continue to pay them through dull 
seasons. The successful employer will have large capi- 
ital and credit, and will be able to keep men employed 
even at times when he makes no profits himself. The 
employers and the employed ought not to pull apart, 
but to pull together. They are engaged in two sides of 
the same v/ork. 

Cooperation and profit-sharing. — Enterprises are 
often undertaken in which all who have part in the 
work share in the profits. This used to be done in the 
fisheries, where perhaps a group of neighbors owned 
and fitted out the vessel. It has been done in certain 
manufactories and on plantations. It has been done on 
a great scale in England (the Rochdale stores) and in 



EMPLOYERS AND THE EMPLOYED QI 

Belgium in the business of distributing goods, and in Den- 
mark and Ireland among the farmers. The best form 
of all is that which gives the workers a vote in the 
conduct of the business and a voice also in the election 
of the managers. Why should not every business be a 
democracy in itself? Why should it not have directors 
to represent the workers as well as directors for the capi- 
tal? If it is a business that serves the public like a 
railway system, why should it not have directors to 
represent the interests of the people who use the road? 
Why should there not be at suitable times free discus- 
sion of the subjects which concern those who work, and 
those who superintend, and the people whom the busi- 
ness serves? Let all sides understand each other and 
so learn to work together better. 

All kinds of business, however, are really more co- 
operative than men think. For the payment of regular 
salaries and wages (which are apt to rise in good times, 
and fall in poor times) is simply a method of sharing the 
profits of business with those who are concerned in 
carrying it on. On the whole, a man's share depends 
upon how useful or necessary he is. Moreover, many 
great corporations, like the Pennsylvania Railroad, ad- 
vance their wages according to the length of faithful 
service, and give pensions to aged workmen. It is often 
possible for employees to invest their savings in the 
shares of the company for which they work. Of course, 
however, those who share the profits of their work must 
also share the losses. 

Men who have been the employees of others some- 
times combine and establish a business or an industry 
of their own. The new enterprise, like any other cor- 



92 RIGHTS AND DUTIES OF BUSINESS AND LABOR 

poration, is then subject to the usual conditions of 
success, namely, the energy, prudence, and honesty of 
its managers. 

Women's work and wages. — How about women's 
wages? Ought they to be the same as men's? We 
have seen that wages follow the law of supply and 
demand; but when they become very low, humanity 
interposes, and forbids paying less. As a rule, this 
limit to which wages fall is lower for women than for 
men. This is partly because of the survival of bar- 
barous ideas as to the worth of women. It is partly 
because certain employments are beyond women's 
strength, while the number of women seeking work 
constantly increases. Many women who live at home 
are glad to earn a little money at wages lower than 
they could afford if they had wholly to support them- 
selves. Employers who find willing hands at a dollar a 
day cannot easily pay more to other women, no more 
skillful, who need two dollars a day. 

Moreover, the wages of women are allowed to be 
lower than in the case of men, even for the same work, 
on the ground that a man must have enough to support 
a family, while a woman more often has only herself 
to support. This custom frequently works hardship, 
but its service is to keep famihes together. Men's work, 
as a rule, is also for life; whereas when working women 
marry their work is apt to change to meet the calls of 
domestic life. 

The industrial democracy. — We are used to the idea 
of a political democracy in which every man is a citizen, 
with the opportunity to fit himself for any service in 
the State. The industrial democracy, or the Common- 



EMPLOYERS AND THE EMPLOYED 93 

wealth of labor, is now coming into view. Here, too, we 
cannot have any servile class, but every man and his 
labor must bear the hall mark of worth. Every one is 
respected for his character and for the value of his con- 
tribution to the common product. The Commonwealth 
cannot afford to allow its famiHes to live meanly. It 
proposes to give every child the education and the fair 
chance to make his way up to a useful and honorable 
place, to ''make good" for all that he has cost, and 
to leave the world somewhat better off. In this Com- 
monwealth human society is a grand order, L'ke the 
human body, made up of millions of Hving cells. The 
interests of each are the interests of all, and all are 
partners. FriendHness is the rule and not the excep- 
tion. Whoever makes human life richer, happier, or 
nobler belongs to this Commonwealth. 



